2010-072 Business opportunities in the Mexican dairy industry

Business opportunities
in the Mexican dairy industry
Business opportunities
in the Mexican dairy industry
Jo H.M. Wijnands
Bibiana M. Armenta Gutiérrez
Judith J. Poelarends
(Wageningen UR Livestock Research)
Olga M.C. van der Valk
LEI-report 2010-072
Wageningen UR Livestock Research report 397
September 2010
LEI project code 2271000008
LEI, part of Wageningen UR, The Hague
2
Business opportunities in the Mexican dairy industry
Wijnands, J.H.M., B.M. Armenta Gutiérrez, J.J. Poelarends and
O.M.C. van der Valk
LEI-report 2010-072
ISBN/EAN: 978-90-8615-460-9
Price € 26,75 (including 6% VAT)
124 p., fig., tab., app.
This study explores the Mexican and Dutch business opportunities in the dairy
industry in Mexico. The report discusses first the external environment of the
Mexican dairy sector: the economic developments, the country's overall competitiveness, and the economic and agricultural policies. Next, it describes all
links in the dairy supply chain - suppliers, farmers, processors, retailers and
consumers - as well as the supporting and enhancing environment. Business
opportunities are analysed in a strategic management framework.
Este estudio explora las oportunidades de negocio holandesas y mexicanas en
la industria de lácteos en México. El informe analiza, en primer lugar, el entorno
externo del sector lácteo mexicano: el desarrollo económico, la competitividad
general del país y las políticas agrícolas y económicas. A continuación, el informe describe los distintos eslabones de la cadena de suministro lácteo: proveedores, ganaderos, procesadores, minoristas y consumidores, así como el
entorno de mejora y apoyo. Las oportunidades de negocio se analizan dentro
de un marco de gestión estratégica.
Dit onderzoek verkent de kansen voor Mexico en Nederland in de Mexicaanse
zuivelindustrie. Eerst wordt de externe omgeving van de Mexicaanse zuivelsector besproken: de economische ontwikkelingen, het concurrentievermogen van
het land en het beleid op het gebied van economie en landbouw. Vervolgens
gaan we in op alle actoren in de zuivelketen - leveranciers, veehouders, fabrikanten, winkeliers en consumenten - en het ondersteunende en stimulerende
omgeving. De kansen worden geanalyseerd binnen een strategisch managementkader.
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BOCI code BO-10-010-121, 'The Mexican dairy chain'
This research has been carried out in the framework of the Policy Research
Cluster International (BOCI) by Commission of the Dutch Ministry of Agriculture,
Nature and Food Quality (LNV).
Photo: Judith J. Poelarends (Wageningen UR Livestock Research)
Orders
+31.70.3358330
[email protected]
© LEI, part of Stichting Dienst Landbouwkundig Onderzoek (DLO foundation),
2010
Reproduction of contents, either whole or in part, is permitted with due
reference to the source.
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LEI is ISO 9001:2008 certified.
Contents
Acronyms
Preface
Summary
Resumen
Samenvatting
7
9
10
14
14
1
Introduction: goal and method
22
2
Country profile and policies
24
2.1 Country profile
2.2 Trade policies
2.3 Agricultural policies
24
27
29
Dairy production and trade: an international benchmark
35
3.1 Benchmark countries and self sufficiency
3.2 Dairy production and yields
3.3 Import of dairy products by Mexico
35
36
37
Suppliers to the dairy chain
39
4.1
4.2
4.3
4.4
4.5
4.6
39
42
44
45
46
49
3
4
5
Breeding
Feed industry
Credit facilities
Animal health
Milk quality control
Machinery and equipment
Structure and performance of dairy farms
52
5.1
5.2
5.3
5.4
52
57
59
62
Structure
Economic indicators
Challenges and perspectives
Veal production
6
Processing industry
64
7
Wholesalers, retail and consumption of dairy products
68
5
8
9
10
Supporting and enhancing environment
73
8.1 Farmers and dairy processors associations
8.2 Knowledge infrastructure: research and extension
8.3 Sustainability
73
75
77
SWOT analysis
78
9.1 Introduction
9.2 SWOT: Strengths, Weaknesses, Opportunities and Threats
9.3 Key Success Factors and business opportunities
78
79
83
Recommendations and Dutch Business opportunities
86
10.1 Recommendations
10.2 Dutch Business opportunities
86
87
References
90
Appendices
1
2
3
4
5
6
7
8
9
10
6
List of interviewed persons during fact finding mission
Administrative regions, capital, population and area
Sagarpa programmes in 2010
Output and input use based Producer Support estimates (PSE)
National milk Production, number of cows and yield per cow
Regional distribution of milk production and price per litre
Import of dairy products by Mexico
Dairy trade of selected countries
Personnel and production value in the dairy milk industry a)
List of companies related to the Mexican Dairy sector
95
97
99
100
101
103
105
107
108
109
Acronyms
AI
ANGLAC
Artificial Insemination
Asociación Nacional de Ganaderos Lecheros
bn
CANILEC
billion = 1,000,000,000
National Chamber of Milk Processors
CNOG
CNC
Confederación Nacional de Organizaciones Ganaderas
Confederación Nacional de Campesinos
Cofocalec
CONAFAB
CVA
Mexican Council for the Quality of Milk and Dairy Products
National Council of Manufactures of Concentrates and
Animal Feed
Centro de Valor Agregado
EEUU
EKN
Estados Unidos de America
Embassy of the Kingdom of the Netherlands in Mexico
EU
EUR
European Union
Euro, Currency of the European Union
FAO
FICA
Food Agricultural Organisation of the United Nations
Agribusiness Capital Investment Fund
FIRA
FNDPCL
Trust Funds for Rural Development)
Frente Nacional para la Defensa de los Productores y
Consumidores de Leche
FOCIR
Ggavatt
Capitalisation and Investment Fund for the Rural Sector
Cattle ranchers' technology validation and transfer groups
HACCP
GDP
Hazard Analysis and Critical Control Point system
Gross Domestic Production
INIFAP
Instituto Nacional de Investigaciones Forestales,
Agrícolas y Pecuarias
LNV
KI
Dutch Ministry of Agriculture, Nature and Food Quality
Kunstmatige Inseminatie
m
MXN
million =1,000,000
Mexican Pesos
NAFINSA
NAFTA
Nacional Financiera S.N.C. is a Development Bank
North American Free Trade Agreement
NMX
NOM
Normas Mexicanas, voluntary norms
Norma Oficiales Mexicana
7
NPC
OECD
PROGAN
Prolea
8
Nominal Protection Coefficient (% domestic producer price
above border prices)
Organisation for Economic Co-operation and Development
Enhancing sustainable use of natural resources programme
of Sagarpa
Productores de Leche de Acatic
Profeco
Procuraduria Federal del Consumidor
(Consumer protection agency)
PSE
Sagarpa
SE
Producer Support Estimates (Support in % of farm receipt)
Secretary of Agriculture, Livestock, Rural Development,
Fisheries and Food
Secretary of Economy
Sedesol
SIAP
Secretary of Social Development
Servicio de Información Agroalimentaria y Pesquera
SIEM
Soporte
Sistema de Información Empresarial Mexicano
(Entrepreneurial Information System of Mexico)
Sagarpa programme on technical assistance and training
SWOT
TCLAN
Strengths, Weaknesses, Opportunities, and Threats analysis
Tratado de Libre Comercio de América del
TPC
UNPP
Total Plate Count
Unión nacional de Productores Pecuarios
USA
USD
United States of America
United States of America Dollar
WTO
WUR
World Trade Organisation
Wageningen UR (University and Research centre)
Preface
This report analyses the opportunities for firms and organisations on the
Mexican dairy market. The opportunities are addressed to firms and organisations in all levels of the supply chain ranging from suppliers to processors in the
dairy industry. The opportunities are for Mexican as well as Dutch actors.
During the fact-finding missions in Mexico, we met numerous Mexican entrepreneurs, government officials, and representatives of non-profit and research
organisations. Appendix 1 provides the list of the consulted stakeholders. Their
cooperation contributed largely to this final report. We would like to thank them
for their time, openness, and inspiring input.
In addition, we thank the Agricultural Counsellor, Gabrielle NuytensVaarkamp, and the Agricultural Assistant, Leonora Hammer, both of the Embassy of the Kingdom of the Netherlands in Mexico (EKN), and the region Officer
of the Dutch Ministry of Agriculture, Nature and Food Quality, Jochem Porte, for
their support during the research and their valuable comments on earlier drafts
of this report.
The statements, findings, interpretations and conclusions expressed in this
report are those of the authors and do not necessarily reflect the views of, or
are endorsements from the Dutch Ministry of Agriculture, Nature and Food
Quality or representatives from the Embassy of the Kingdom of the Netherlands
in Mexico.
Reading suggestion
Each chapter presents at the beginning the Key findings for a quick overview of
the contents. The summary, the SWOT analysis in Chapter 9, and the conclusions and recommendations in Chapter 10, provide the main information for
policymakers. The other chapters provide in-depth background information for
the interested readers.
Prof. Dr R.B.M. Huirne
Managing Director LEI
9
Summary
Does the expanding Mexican dairy sector offer opportunities for investments,
by either domestic or Dutch firms or organisations? This report shows that the
Mexican dairy sector offers opportunities for:
1. Enhancing a higher performance of the large semi-specialised and dualpurpose cow's farmers. This can be achieved by enhancing farmers' management capabilities and milking infrastructure.
2. Levelling the seasonality of the milk supply. There is a gap of 30% between
domestic milk production and consumption. Seasonality results in periods of
peaks and dips. Levelling will improve the Mexican self-sufficiency on dairy
products. Milk based on imported milk powder is cheaper than domestic
fresh milk. Investments in milk powder plants in Mexico will be hardly profitable due to the low import prices and a self-sufficiency of milk below 100%
during the whole year.
3. A focussed agenda setting strategy. This strategy needs to be shared by all
chain actors and organisations, to enhance the Mexican dairy industry as a
whole. Table 9.1 provides Key Success Factors, actions and opportunities
addressed to each chain actor.
4. Veal production as in the Netherlands is no opportunity: the Mexican consumers do not know such meat and production resources have better opportunities.
Within this framework of Mexican opportunities, a major possibility for Dutch
organisations is to enhance the capabilities of Mexican enterprises in the dairy
sector. Table S1 provides an overview of business opportunities for specific
actors. The study is based on a literature review, analyses of databases, and
a fact-finding mission in July 2010.
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Table S1
Dutch business opportunities
Firm or organisation
What
Key Success Factor
Seed breeders
Improved grass and roughage
Knowledge transfer in feed/grass
seeds
management
Semen and embryos
Awareness at semi-specialised
Cattle breeders and
Artificial Insemination
Feed industry
farms Infrastructure of AI stations
Technology for concentrates
Producing concentrates at
and feed management
competitive prices
Knowledge transfer in feed
management
Milk production control
Equipment and connected IT
at cow level
Awareness at semi-specialised
firms
Capabilities on milk quality and
cattle management
Processing industry
Joint ventures
Exploiting consumer preferences
Dutch exporters
Final products
Exploiting low cost prices and
differentiated products
Knowledge organisations Transfer of knowledge
Enhancing the opportunities of
Dutch Government
Providing information on style and
Mexican firms and organisations
Business linkage
culture of Mexican dairy industry
Economics, policies, and international trade
The Netherlands ranks 10th and Mexico 64th on the Global Competitiveness Index. Corruption, crime, and theft rank high as problematic factors in doing business in Mexico. Membership of NAFTA opened the Mexican economy. Farmers'
subsidies and trade protection have been largely abolished.
Mexico has 111m inhabitants and the Netherlands 17m. Milk production in
both countries is almost on the same level, 11m tonnes. The annual growth is
1.9% in Mexico and 0.4% in the Netherlands. Mexico is a net importer of dairy
products, 45% of the import value is milk powder. USA supplies over 55% of all
dairy products, the Netherlands 2%, mainly cheese (USD27m).
The main trade partner for machinery is the USA. Mexico imports a negligible amount of machinery from the Netherlands. The import of vaccines for veterinary medicines from the Netherlands is below 10% of the total imports: the
USA supplies over two-thirds.
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Suppliers to the dairy chain
Milk production control per cow is almost not practiced in Mexico and hampers
proficient farm management and breeding. Only 2 to 3% of the farms, but 95%
of large farms, use artificial insemination. Maize is important feed, with total
feed costs of 60% of the milk cost price. Farmers own 65% of the processing
capacity of concentrate feed.
Credit facilities, largely supported by the government, offer soft loans
and/or subsidies. This did not improve the position of farmers. Lack of sufficient
capital and interest rates up to 14% are threats for the dairy farmers. The perception of high risks and low return and farmers' attitude (loans are subsidies)
do not improve access to credit facilities. This perception does not match the
real risks in dairy farming.
Mexico has public and private standards for milk quality. Initiatives focus on
improving the poor awareness of the quality. The conditions and support of the
processors determine the use of milk machines and cooling tanks.
Structure and performance of dairy farms
Mexico's dairy farms can be classified in three systems: from semi-specialised
or smallholders, dual-purpose farms to large state-of-the-art operations. The latter are comparable with those in the USA, have good infrastructure (cold chain),
supply to large processors, and are quality conscious. Dual-purpose farms are
common in the tropic regions. Many semi-specialised farms lack access to or
do not use the cold chain. They supply their milk to artisan cheese makers, the
milk quality is not perceived as reliable.
The average yield per animal (5,000kg of milk) is on a fair level compared to
most benchmark countries. The milk yield per cow ranges between 700 to over
9,000kg per cow. The milk production shows seasonality: high milk deliveries in
spring and summer, low in the autumn and winter. Mexico allows the use of BST
to increase milk production. Some milk processors refuse this 'BST-milk'.
Farm gate prices of Mexican milk are slightly below the price in the USA.
The milk price in 2008-2009 is approximately MXN4.50 (EUR0.27). Farm management related to feed, cattle care, roughage production and rearing calves is
seen as a major weakness. Stakeholders expect a production growth at bettermanaged farms. Improving management is clearly an opportunity.
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Processing retail and consumption
The dairy processing industry gives direct employment to 37,000 and indirect
employment to 200,000 people on over 300 dairy processors. These companies use on average 80% of their production capacity and almost all have their
own milk quality control system. The three largest milk processors - Lala, Nestlé
and Sigma - process over two-thirds of the total milk. Over 2,000, not officially
registered artisanal cheese-makers mainly process uncooled raw milk.
Supermarkets and convenience stores are the main outlet for processed
fresh milk; the daily/week market for raw milk. Milk and milk products take almost 3% of the consumer budget (10% of the food expenditures). Retail sales of
traditional products are stable: flavoured milk and yoghurts show annual
growths of 2 to 3%. The per capita dairy consumption of 300 ml/day is too low
according to the FAO recommendations of 600 ml/day. The Mexican milk consumption will increase with a growing population (1.3%) and income.
Supporting and enhancing environment
Farmers' associations represent farmers in different ways from enhancing capabilities to political pressure group activities. Canilec represents the dairy processors. Different stakeholders comment that practical training and professional
education is lacking for service providers. Also applied research is poor.
Sustainability is of growing concern for both government and private sector.
The Government is targeting the primary sector with specific programmes
and Nestlé focuses on sustainability of their suppliers, which are mainly farms
with dual-purpose cows.
13
Resumen
¿ Ofrece el creciente sector lechero mexicano oportunidades de inversión para
empresas y organizaciones sean domésticas u holandesas? Este informe demuestra que el sector lechero mexicano ofrece oportunidades para:
1. Obtener un mayor rendimiento en las granjas lecheras semi-especializadas
y de doble propósito. Esto puede lograrse al mejorar las capacidades de
gestión y de administración de los agricultores y al mejorar la infraestructura de ordeña.
2. Mejorar la autosuficiencia nacional en productos lácteos al nivelar la
estacionalidad de la producción de leche. Existe una diferencia del 30% entre la producción doméstica de leche y el consumo nacional. Sin embargo,
es más barato elaborar productos lácteos basados en leche en polvo importada que utilizar la leche fresca de producción doméstica. Como consecuencia, mientras que los precios de importación de productos lácteos
sigan más bajos que los de la leche fresca doméstica, estará en riesgo la
rentabilidad de inversiones en plantas deshidratadoras para producir leche
en polvo en México.
3. Definir una agenda compartida por todos los actores y organizaciones hacia
el mejoramiento de la industria mexicana de lácteos en su totalidad. Tabla
9.1 proporciona factores clave de éxito, acciones y oportunidades de cada
actor de la cadena productiva.
4. La producción de carne de ternera como se hace en Holanda no representa
una oportunidad: los consumidores mexicanos no tienen preferencia para
este tipo de carne y hay mejores oportunidades de utilización de los recursos productivos.
Dentro del marco de oportunidades en México, las organizaciones holandesas pueden contribuir al fortalecimiento de las capacidades de las empresas
mexicanas. Tabla R1 proporciona una visión general de las oportunidades de
negocio para actores específicos. El estudio realizado se basa en un revisión
de literatura, análisis de bases de datos y una gira por el sector lechero mexicano (Julio 2010).
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Tabla R1
Oportunidades de negocios para empresas holandesas
Empresa u
Oportunidad
Factor clave de éxito
Productores de
Semillas mejoradas
Transferencia de conocimientos en la
semillas
de hierba y fibra
gestión de la alimentación/pasto
Criadores de ganado
Semen y embriones
Mayor conciencia en las granjas semi-
organización
e inseminación
especializadas; infraestructura de centros de
artificial
Inseminación Artificial
Industria de alimentos Tecnología para con-
La producción de concentrados a precios
balanceados
centrados y adminis-
competitivos.
tración de alimentos
Transferencia de conocimientos en la admi-
balanceados
nistración de alimentos balanceados
Control de producción Equipos y paquetes
Mayor conciencia en las granjas semi-
de leche de vaca
de informática co-
especializadas
rrespondientes
Capacidades en la administración de la cali-
Alianzas
Explotar las preferencias de los
dad de la leche y de los bovinos
Industria de
transformación
Exportadores
consumidores
Productos finales
holandeses
Explotación precios bajos de costo y productos diferenciados
Instituciones de inves-
Transferencia de co-
Aumentar las oportunidades de las
tigación y formación
nocimientos
empresas mexicanas y organizaciones
Gobierno holandés
Vinculación de nego-
Proporcionar información sobre el estilo y la
cios
cultura de la industria mexicana de lácteos
Economía, políticas nacionales y comercio internacional
Los Países Bajos y México ocupan los lugares 10 y 64 respectivamente en el
índice de competitividad global. La corrupción, el crimen y el robo son considerados como factores de riesgo al hacer negocios en México. La economía
mexicana se abrió al entrar en vigor el TLCAN. En gran medida se han eliminado
las subvenciones y la protección comercial de los agricultores.
México tiene 111 millones de habitantes contra 17 millones en los Países
Bajos. La producción de leche (11 millones de toneladas) está prácticamente en
el mismo nivel en ambos países. El crecimiento anual es del 1.9% en México y
de un 0.4% en los Países Bajos. México es un importador neto de productos
lácteos, de los cuales la leche en polvo representa el 45% del valor de importación. De todos los productos lácteos, los EEUU suministra más del 55%, y los
Países Bajos 2%, principalmente queso (27 millones de dólares).
15
Los EEUU es el principal proveedor de equipo agrícola. México importa una
cantidad insignificante de equipo de origen holandés. La importación de vacunas para los medicamentos veterinarios provenientes de los Países Bajos está
por debajo del 10% de las importaciones totales, mientras que los EEUU suministra más de dos tercios.
Proveedores a la cadena de productos lácteos
La práctica de control de la producción de leche por vaca es casi inexistente
en México y obstaculiza la administración eficiente de la granja y de la cría.
Aunque el 95% de las grandes granjas utiliza inseminación artificial, se estima
que a nivel nacional este porcentaje no supera el 2 a 3%. Maíz es el alimento
más importante, los costos de la alimentación son el 60% del precio de costo
de la leche. Las granjas integradas tienen el 65% de la capacidad total de la industria de alimentos balanceados.
Las facilidades de crédito, en gran medida apoyadas por el Gobierno,
ofrecen préstamos a condiciones favorables y/o subvenciones. No obstante,
esto no ha mejorado la posición de los agricultores. La falta de capital
suficiente y las tazas de interés de hasta el 14%, forman las amenazas para los
agricultores de leche. El acceso a crédito se dificulta por la
percepción de riesgos elevados en el sector agrícola; su baja rentabilidad y por
los agricultores que consideran préstamos como subvenciones. Esta percepción sin embargo no coincide con los riesgos reales en la ganadería lechera.
México tiene normas públicas y privadas para el control de la calidad
de la leche. Hay iniciativas para promover la mayor conciencia de calidad. Los
apoyos y las condiciones de compra manejados por los procesadores de leche
determinan el uso de equipo de ordeña y tanques de enfriamiento.
Estructura y rendimiento de las granjas lecheras
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Las granjas lecheras en México pueden clasificarse en tres sistemas que
van desde semi-especializadas y pequeñas, de doble propósito, a grandes operaciones de tecnología de punta. Estas últimas son comparables a las de los
EEUU en cuanto a eficiencia: tienen buena infraestructura (cadena de enfrío),
suministran a los procesadores grandes y manejan control de calidad. Las granjas de doble propósito se ubican en las regiones tropicales. Muchas granjas
semi-especializadas carecen de acceso a la cadena de enfrío o no la tienen.
Suministran su leche, cuya calidad no es percibida como fiable a los procesadores de queso artesanal.
El rendimiento promedio por animal (5000 kg de leche) está a un nivel comparable a la mayoría de los países de referencia; y oscila entre los 700 y
9000 kg/vaca. La producción de leche se caracteriza por estacionalidad,
con altas entregas de leche en primavera y verano contra bajas entregas en
otoño e invierno. México permite el uso de BST para aumentar la producción de
leche. Algunos procesadores de leche rechazan la 'leche con BST'.
Los precios al productor están ligeramente por debajo del precio en los
EEUU. El precio de la leche en 2008-2009 estaba cerca de de 4,50 MXN (0,27
euros). El nivel de administración granjera relacionado con la alimentación, la
atención al ganado, la producción de la fibra y la cría de terneros se considera
una debilidad importante, afectando la producción. Así que se destacan claras
oportunidades en el mejoramiento de la administración.
Procesamiento; ventas al menudeo y el consumo
La industria de lácteos genera 37.000 empleos directos y 200.000 empleos
indirectos en los más de 300 procesadores. Estas empresas utilizan en promedio el 80% de su capacidad de producción y casi todas tienen su propio sistema de control de calidad de la leche. Los tres procesadores de leche más
grandes - Lala, Nestlé y Sigma- procesan más de dos tercios del total de productos lácteos. Más de 2.000 procesadores no oficialmente registrados, fabrican queso artesanal, utilizando principalmente leche cruda no enfriada.
La leche fresca procesada se comercializa a los supermercados y tiendas
de conveniencia; la leche cruda se destina al tianguis. La leche y los productos
lácteos forman casi el 3% del presupuesto del consumidor (el 10% de los gastos en alimentos). Las ventas al menudeo de los productos tradicionales son
estables: la leche y los yogures con sabor muestran un crecimiento anual de
2 a 3%. El consumo de productos lácteos por día per cápita de 300 ml es más
bajo que el consumo recomendado por la FAO de 600 ml. El consumo mexicano de leche aumentará al crecer la población 1.3%y los ingresos.
El entorno de apoyo al sector lechero
Las asociaciones de agricultores se empeñan en mejorar las capacidades de
gestión y ejercen presiones políticas. Canilec representa a los procesadores de
productos lácteos. Distintos actores comentan que el sector lechero carece de
educación profesional y de formación práctica para proveedores de servicios.
También la investigación aplicada es considerada de pobre calidad.
La sustentabilidad es una preocupación emergente para el Gobierno y el
sector privado. El Gobierno se enfoca al sector primario con programas específicos relacionados al cambio climatológico. Empresas como Nestlé promueven
la sustentabilidad de sus proveedores, que son principalmente las granjas de
vacas de doble propósito.
17
Samenvatting
Biedt de groeiende Mexicaanse zuivelsector kansen voor investeringen door
Mexicaanse of Nederlandse bedrijven of organisaties? De Mexicaanse zuivelsector biedt kansen voor:
1. Versterking van de bekwaamheden van de grote semi-gespecialiseerde
veehouders en veehouders met dubbeldoelkoeien. Dit kan worden bereikt
door het management en de zuivelinfrastructuur van de boeren te verbeteren, de verliezen te reduceren en transparantie in de keten te stimuleren.
2. Afvlakking van seizoensfluctuaties van de melkaanvoer. In Mexico wordt
30% minder melk geproduceerd dan dat er wordt geconsumeerd. Door de
seizoensfluctuaties ontstaan er pieken en dalen en wordt de verwerkingscapaciteit mogelijk niet maximaal benut tijdens periodes waarin er weinig
rauwe melk wordt aangevoerd. Afvlakking van de seizoensfluctuaties zal de
zelfvoorziening van Mexico op het gebied van zuivelproducten verbeteren.
Melk op basis van geïmporteerd melkpoeder is goedkoper dan verse melk
uit Mexico zelf. Het is nauwelijks winstgevend om te investeren in melkpoederfabrieken in Mexico vanwege de lage importprijzen en vanwege het feit
dat Mexico het hele jaar door niet 100% zelfvoorzienend in melk is.
3. Vaststellen van een duidelijk gedefinieerde strategie. Deze dient gedragen
te worden door alle actoren en organisaties in de keten om de zuivelindustrie in Mexico als geheel te verbeteren. In tabel 9.1 staan de belangrijkste
succesfactoren, acties en kansen van elke actor in de keten.
4. Kalfsvleesproductie zoals in Nederland is geen kans: de Mexicaanse consument eet geen kalfsvlees en de productiebronnen kunnen beter worden
benut.
Binnen dit kader van kansen voor Mexico kunnen ook Nederlandse organisaties bijdragen aan het verbeteren van de capaciteiten van Mexicaanse bedrijven
in de zuivelsector. Tabel 1 geeft een overzicht van de kansen voor specifieke
actoren: van leveranciers tot consumenten, beleid, ondersteunende en stimulerende organisaties. Het onderzoek is gebaseerd op een literatuuronderzoek,
analyses van databases en een informatie verzameling tijdens een veldbezoek in
Mexico.
18
Tabel S1
Bedrijf of
Kansen voor Nederland
Wat
Belangrijkste succesfactoren
organisatie
Zaadveredelaars
Verbeterd graszaad
Kennisoverdracht op het gebied van voer-
en ruwvoer
/grasmanagement
Veefokkers en KI
Sperma en embryo's
Bewustheid onder semi-gespecialiseerde vee-
Diervoederindustrie
Kennis over techno-
Productie van geconcentreerd voer tegen
logie voor krachtvoer
concurrerende prijzen
en voermanagement
Kennisoverdracht op het gebied van voerma-
houders, infrastructuur van KI-centra
nagement
Melkproductiecontrole Machines en bijbeho-
Kennis bij semi-gespecialiseerde veehouders
per koe
rende IT-
Kennisoverdracht op het gebied van melkkwa-
infrastructuur
liteit en rundveehouderij
Verwerkende industrie Samenwerkings-
Inspelen op de voorkeuren van consumenten
verbanden
Nederlandse expor-
Eindproducten
teurs
Kennisorganisaties
Uitbaten van lage kostprijs en gedifferentieerde producten
Kennisoverdracht
Vergroten van de kansen van Mexicaanse bedrijven en organisaties
Nederlandse overheid Business linkage
Vestrekken van informatie over de vorm en
cultuur van de Mexicaanse zuivelindustrie
Economie, beleid en internationale handel
Mexico heeft 111 miljoen inwoners en Nederland 17 miljoen. De primaire landbouw vormt 4% van het BBP in Mexico, de industrie 37% en de dienstverleningssector 59%. In Nederland zijn deze respectievelijk 2%, 25% en 73%.
Nederland staat 10e en Mexico 64e op de Global Competitiveness Index. De
bedrijven in Mexico hebben met name te maken met corruptie, criminaliteit en
diefstal. Door lidmaatschap van NAFTA is de Mexicaanse economie open. Subsidies voor boeren en handelsbescherming zijn grotendeels afgeschaft.
De melkproductie (11 miljoen ton) is in beide landen ongeveer even hoog.
De jaarlijkse groei is 1,9% in Mexico en 0,4% in Nederland. Mexico is een nettoimporteur van zuivelproducten: 45% van de importwaarde is melkpoeder. De VS
leveren meer dan 55% van alle zuivelproducten. Mexico importeert 2% van hun
zuivelproducten uit Nederland, vooral kaas (USD27 miljoen).
De belangrijkste handelspartner voor machines zijn de VS. Het aantal machines dat Mexico uit Nederland importeert, is verwaarloosbaar. De import van
19
vaccins voor veterinaire medicijnen uit Nederland vormt minder dan 10% van de
totale import: de VS leveren meer dan twee derde.
Het ministerie van Landbouw en dat van Sociale Ontwikkeling richten zich op
het verbeteren van de productiviteit, de zuivelinfrastructuur (melkmachines en
koeltanks), de fokprogramma's, de innovatie en de capaciteitsopbouw.
Leveranciers in de zuivelketen
Er is bijna geen melkproductiecontrole per koe in Mexico en dat vormt een belemmering voor professionele bedrijfsvoering en fokkerij. Hoewel 95% van de
grote veehouderijen gebruik maakt van kunstmatige inseminatie, is dat in Mexico slechts 2 à 3% van de veehouders.
Maïs vormt een belangrijk onderdeel van het voer en de voerkosten vormen
60% van de kostprijs van de melk. 65% van de verwerkingscapaciteit van
krachtvoer is in handen van veehouders.
De kredietmogelijkheden die grotendeels door de overheid worden aangeboden, zijn zachte leningen en/of subsidies. Dit heeft echter niet gezorgd voor
een betere positie van de veehouders. Een gebrek aan voldoende geldmiddelen
en rentevoeten tot 14% vormen een bedreiging voor melkveehouders. Het idee
dat kredietfaciliteiten een hoog risico vormen en maar weinig opbrengen en de
houding van veehouders (leningen zijn subsidies) maken de kredietfaciliteiten
niet toegankelijker. De perceptie van de risico's komt echter niet overeen met
de daadwerkelijke risico's van de melkveehouderij.
Mexico heeft publieke en private normen voor de melkkwaliteit. Initiatieven
zijn erop gericht om melkveehouders meer bewust te maken van de kwaliteit.
De fabrieksomstandigheden en de ondersteuning van de fabrikant bepalen of er
wel of geen gebruik wordt gemaakt van melkmachines en koeltanks.
Structuur en prestaties van melkveehouders
20
Melkveebedrijven in Mexico kunnen in drie categorieën worden onverdeeld: semi-gespecialiseerde of kleine bedrijven, veehouders met dubbeldoelkoeien en
grote, hypermoderne ondernemingen. De laatste categorie is vergelijkbaar met
bedrijven in de VS. Deze hebben een goede infrastructuur (koelketen), leveren
aan grote fabrikanten en zijn zich bewust van de kwaliteit. Melkveehouders met
dubbeldoelkoeien komen veel voor in de tropische gebieden van het land. Veel
semi-gespecialiseerde melkveehouders hebben geen toegang tot of maken
geen gebruik van de koelketen. Ze leveren hun melk aan ambachtelijke kaasmakers en hun melkkwaliteit wordt niet als betrouwbaar ervaren.
De gemiddelde opbrengst per dier (5.000 kg) is redelijk ten opzichte van de
meeste benchmarklanden. De melkopbrengst varieert van 700 tot meer dan
9.000 kg per koe. Sommige melkveehouders hebben zelfs koeien met een opbrengst van 13.000 kg per koe De melkproductie is seizoensgebonden: in de
lente en zomer is de melkopbrengst hoog, in de herfst en winter laag. Mexico
staat het gebruik van BST om de melkproductie te verhogen toe. Sommige
melkfabrikanten weigeren echter 'BST-melk'.
De af-boerderij-prijzen van Mexicaanse melk liggen net onder de prijs in de
VS. De melkprijs in 2008-2009 was ongeveer MXN 4,50 (EUR 0,27). Het ondernemerschap op het gebied van voer, rundveeverzorging, ruwvoerproductie en
opfok van kalveren is zeer zwak. Stakeholders verwachten dat de productie zal
toenemen als er een beter bedrijfsmanagement wordt toegepast. Het verbeteren van het management is duidelijk een kans.
Verwerking, retail en consumptie
Voor de zuivelindustrie werken direct 37.000 en indirect 200.000 personen in
meer dan 300 fabrieken. Deze gebruiken gemiddeld 80% van hun productiecapaciteit en bijna alle hebben hun eigen controlesysteem voor de melkkwaliteit.
De drie grote zuivelfabrikanten – Lala, Nestlé en Sigma – verwerken meer dan
twee derde van de totale melk. Meer dan 2.000 niet officieel geregistreerde
ambachtelijke kaasmakers verwerken voornamelijk niet-gekoelde, rauwe melk.
Verwerkte verse melk wordt vooral verkocht in supermarkten en gemakswinkels; de rauwe melk gaat naar dag- en weekmarkten. Consumenten besteden
ongeveer 3% van hun budget (10% van hun voedselbudget) aan zuivel. De detailhandel in traditionele producten is stabiel: de verkoop van drinkyoghurt en
yoghurt groeit jaarlijks met 2 à 3%. De zuivelconsumptie per hoofd van de bevolking van 300 ml/dag is te laag volgens de aanbeveling van de FAO van 600
ml/dag/hoofd van de bevolking. De Mexicaanse melkconsumptie zal toenemen
naarmate de bevolking groeit (1,3%) en het inkomen stijgt.
Ondersteunende en stimulerende omgeving
Organisaties vertegenwoordigen veehouders op verschillende manieren: van
verbetering van bekwaamheden tot politieke pressiegroepactiviteiten. Canilec
vertegenwoordigt de zuivelfabrikanten. Verschillende stakeholders zijn van mening dat er een gebrek is aan praktijkopleidingen en onderwijs voor dienstverleners. Ook de kwaliteit van het toegepaste onderzoek is niet goed.
Duurzaamheid vraagt een toenemende aandacht van de overheid en de private sector. De overheid houdt zich bezig met specifieke programma's voor de
primaire sector en Nestlé richt zich op duurzaamheid van hun leveranciers, voornamelijk veehouders met dubbeldoelkoeien.
21
1
Introduction: goal and method
Key findings
-
-
22
This report addresses the question: Does the expanding Mexican dairy sector offer opportunities for investments, by either domestic or Dutch firms or
organisations?
A literature review, analyses of databases, and a fact-finding mission are the
input for the SWOT analysis.
The report discusses the environment of the dairy chain and the dairy chain
from suppliers to consumers. The business opportunities are derived from a
SWOT analysis.
Does the expanding Mexican dairy sector offer opportunities for investments, by either domestic or Dutch firms or organisations? The office of the
Dutch Ministry of Agriculture, Nature and Food Quality in Mexico already published a report on business opportunities in the poultry, pig and feed sector
(Klok, 2007). A market report on the dairy industry is lacking, while several developments in the Mexican dairy sector are of interest. Mexico's dairy production and consumption is growing, thanks to a supportive government offering
subsidies for domestic production. The NAFTA agreement promotes trade of
dairy products by the abolishment of tariffs. The government aims at stimulating
the domestic production and at becoming less dependent on imports mainly
from the USA. An important issue is the improvement of the social economic
situation of the Mexican agricultural sector. An in-depth study of the Mexican
dairy chain identifies the possible market opportunities for the Dutch agribusiness.
The main goal is to identify possible market opportunities for the Mexican
dairy industry. The Dutch agribusiness' opportunities are framed in the opportunities on the Mexican market. The focus is on products based on cow milk; goat
milk has not been studied. Goats produce about 1.5% (165,000 tonnes) of the
total milk production (SIAP, 2009). A second goal is to explore the possibilities
of veal production: male calves are not suited for reproduction of dairy cows.
A strategic management approach frames the research. The opportunities
are derived from a Strengths, Weaknesses, Opportunities, and Threats (SWOT)
analysis. The approach is as follows: first, a desk research to review literature
and to analyse databases; second, a fact-finding mission and; third, an integration of the facts and opinions to derive opportunities. During the mission in July
2010, stakeholders from government officials, professional organisations and
researchers to dairy processors in Mexico have been consulted (see Appendix
1).
Structure of the report
The structure of the report is as follows. Chapter 2 first presents the country
profiles of Mexico and the Netherlands and then the Mexican trade and agricultural policy. It mainly describes the external environment of the industry.
Developments in production and trade of dairy products are subject of Chapter 3 portraying the performance of the dairy industry of Mexico benchmarked
against the main dairy trade partners. Chapter 4 to 7 describes the Mexican
dairy supply chain. We follow the production downstream, from suppliers to
consumers. The supporting and enhancing environment are addressed in Chapter 8. Chapters 3 to 8 describe the internal environment of the dairy industry.
The internal and external analyses are the input for the SWOT analysis, presented in Chapter 9. The conclusions and recommendations are subject of
Chapter 10.
23
2
Country profile and policies
Key findings
-
-
2.1
Mexico is 57 times as large as the Netherlands and has 7 times as many inhabitants and the GDP per capita, USD10.000, is 20% of the Dutch level.
Primary agriculture in Mexico accounts for 4% of the GDP, in the Netherlands 2%.
The Netherlands ranks 10th and Mexico 64th on the Global Competitiveness
Index.
Membership of NAFTA opened the Mexican economy. Farmers' subsidies
and trade protection have been largely abolished.
The Ministries of Agriculture and of Social Development aim at enhancing
productivity, dairy infrastructure (milking machines and cooling tanks), breeding, innovation and at capacity building.
Stakeholders have doubts about the effectiveness of the support and subsidies to the sector.
Country profile
Mexico is a federal republic, the president Felipe de Jesus Calderon Hinojosa
(since 1 December 2006) is both chief of state and head of government. He is
elected by popular vote for a single six-year term. The legislative system is a bicameral National Congress (Congreso de la Union). The Senate (Camara de
Senadores) has 128 seats; 96 members elected by popular vote to serve sixyear terms, and 32 seats allocated based on each party's popular vote. The
Chamber of Deputies (Camara de Diputados) has 500 seats; 300 members are
elected by popular vote; the remaining 200 members are allocated based on
each party's popular vote; members serve three-year terms. The legal system is
a mixture of US constitutional and civil law system.
The Mexican economy dependency on primary agriculture (4% of the GDP) is
slightly higher than the Dutch (2%). The service sector dominates the economy
in both countries, 59% in Mexico and 73% in the Netherlands. The USA is the
main trade partner for Mexico, as Germany is for the Netherlands (table 2.1).
24
Table 2.1
Key facts of Mexico and the Netherlands
Indicator
Mexico
Netherlands
Population
111.2m, 7 times that of
16.7m
(2009)
the Netherlands
Growth rate 0.4%
Growth rate 1.3%
Urban population 87%
Urban population 82%
Capital
Mexico City, The Federal District:
Amsterdam 740,000 inhabitants
11,286,000 inhabitants
Climate
From tropical to desert
Temperate, marine
Terrain
High, rugged mountains; low coastal
Mostly coastal lowland and
plains; high plateaus; desert
reclaimed land
Altitudes: -10 to 5,700m
Altitudes: -7 to 322m
194m ha: 57 times
3.4m ha
Land Area 2008
the Netherlands
Agricultural land
106.8m ha, 55% of land area
1.9m ha, 57% of land area
2007
Arable land 13%, permanent crops
Arable land 31%, permanent crops
1% of land area
1% of land area
GDP
USD1,085m
USD860m
GDP-growth
1.8% in 2008; between 3.2 and 4.8%
2.1% in 2008; between 1.5 and
in 2003-2007
3.5% in 2003-2007
Agriculture 4%, industry 37%, and
Agriculture 2%, industry 25% and
services 59%
services 73%
USD10,211
USD52,321
MXN100=USD7.90=EUR6.05
EUR1=MXN16.48=USD1.30
Origin GDP
GDP/capita
Currency
1 August 2010
1 August 2008
MXN 100=USD9.97=EUR6.39
EUR1=MXN15.64=USD1.56
Inflation
3.6% (2009); 6.5% (2008)
1.2% (2009); 2.5% (2008)
Competitiveness
Rank 60 out of 134 countries
Rank 10 out of 134 countries
Main exports
Manufactured goods, oil and
Machinery and equipment,
oil products, silver, fruits,
chemicals, fuels; food
vegetables, coffee, cotton
Export to
US 80.5%, Canada 3.6%,
Germany 25.4%, Belgium 13.7%,
Germany 1.4%
France 8.9%, UK 8.8%, Italy 5.2%
Main imports
US 48%, China 13.5%, Japan 4.8%,
Germany 16.6%, China 10.1%, Bel-
from
South Korea 4.6%,
gium 8.7%, US 7.5%, UK 5.8%,
Germany 4.1%
Russia 5.4%, France 4.4%
Sources: https://www.cia.gov/library/publications/the-world-factbook/geos/mx.html, Schwab, 2009,
http://data.worldbank.org/data-catalog/world-development-indicators, and http://www.geonames.org
25
Figure 2.1
Mexico
Mexico has 32 administrative zones: 31 states and 1 Federal district. The
state of Mexico (11.7m inhabitants), Mexico-City Federal District (8.7), and Veracruz (7.1) have the largest population. Appendix 2 provides information of the
population and area for each administrative zone. The largest cities are: Mexico
City, Monterrey, Guadalajara and Querétaro. Over 82% of the population is urban, which is slightly below the Dutch level.
Mexico ranks 60th out of the 134 countries on the Global Competitiveness
Index (table 2.2). That position is comparable with other South American trade
partners in dairy products. The USA ranks 2nd and the Netherlands ranks 10th
on the Global Competitiveness Index. Compared to these two countries Mexico
has a relatively low rank on most indicators except for macro-economic stability.
Foreign investors need to recognise these differences, especially the institutional framework. Corruption, crime and theft are the most problematic factors
in doing business in Mexico (Schwab, 2009).
26
Chile
Uruguay
USA
Netherlands
Global Competitiveness Index 2009-2010
Brazil
Indicators
Argentina
Competitiveness indicators in 2009/2010 a)
Mexico
Table 2.2
60
85
56
30
65
2
10
Basic requirements
59
84
91
32
49
28
12
Institutions
98
126
93
35
40
34
10
Infrastructure
69
88
74
30
66
8
15
Macroeconomic stability
28
48
109
19
78
93
38
Health and primary
65
59
79
69
52
36
14
Efficiency enhancers
55
84
42
33
82
1
10
Higher education and training
74
55
58
45
50
7
10
Goods market efficiency
90
124
99
26
78
12
6
Labour market
115
123
80
41
119
3
27
Financial market sophistication
73
116
51
32
88
20
23
Technological readiness
71
68
46
42
51
13
2
Market size
11
23
10
44
88
1
18
Innovation and sophistication factors
67
76
38
43
77
1
9
Business sophistication
62
73
32
39
85
5
6
Innovation
78
86
43
49
67
1
13
a) Ranking 1 is best, 134 is worst.
Source: Schwab (2009).
2.2
Trade policies
Mexico has 11 free-trade agreements with 41 countries. The North America
Free Trade Agreement (NAFTA), which came in force in 1994, is the most important for the economy. Under NAFTA, on 1 January 2003 the process of tariff
elimination was finished for the majority of foods with the exception of maize,
beans, powder milk, orange juice, and sugar. The tariffs for these products
were eliminated on 1 January 2008. The partnership agreement with the EU,
called the EU-Mexico Economic Partnership, Political Coordination and Cooperation Agreement, entered into force in 2000. As is shown in Table 2.3, imports
from the US are free from import duties.
27
Table 2.3
Tariffs of main dairy products
Import tariff
Product
Exemptions
Features
10%
Fresh milk
No tariff for United States,
International trade of fresh
Chile and Uruguay
milk is low
No tariff for United States
Production is mainly fresh
and Chile. Uruguay has a
and regional cheeses. Main
preferential tariff
imports are hard cheeses
No tariff for United States
Mexico is first importer of
and Uruguay
Non-fat Dry Milk
20%
Cheese
125%
Powder milk
Source: Iruegas et al. (2007).
Figure 2.2
Nominal Protection Coefficients (NPC) of dairy products
NPC-ratio
7
6
5
4
3
2
1
EU-27
Mexico
N-Zealand
USA
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
0
Brazil
Source: Based on OECD Database 1986-2009 Producer and Consumer Support Estimates.
28
An overall indicator of protection is the Nominal Protection Coefficient (NPC)
provided by the OECD is. An NPC of 1.2 for a country indicates that domestic
producer prices are on average 20% above border prices for the same commodities. The development of the NPC (Figure 2.2) shows high ratios in the
eighties and recently rather low levels. New Zealand shows almost no protection
during all the years. The Mexican NPC is on the same level as the other benchmark countries.
2.3
Agricultural policies
The federal administration launched its Plan Nacional de Desarrollo 20072012 to make Mexico more competitive and include social policies, directed
at the development of the rural areas. The economic policies entail five points
of interests:
1. Constitutional state and security;
2. Creating employment by a competitive economy;
3. Equal opportunities;
4. Environmental sustainability;
5. Effective democracy and responsible foreign policies.
The policies by the Ministry of Economy (SE) aims at fulfilling consumers'
demand, at maintaining the supply of goods, at an overall economic growth,
at complying with Free Trade Agreements, and at keeping inflation down.
The Ministries of Agriculture (Sagarpa) and Social Development (Sedesol) focus
on rural development and poverty reduction.
Respondents comment on conflicting policies by the Mexican Government.
Interviewed stakeholders stated that the government is mixing social policy with
production policy. The latter has failed: the industry sector has not grown, so
there are poor employment opportunities for the agricultural population in the
Mexican industry. Half a million Mexicans enter the USA per year, mostly illegally, because of insufficient employment.
Policies concerning the cattle sector, form part of the Special Competitiveness Programme for Sustainable Rural Development 2009-2020 (FMEI, 2009).
The aforementioned five points of interest are reflected in the National Sector
Development Plan 2007-2012 by SAGARPA. The objectives are:
1. Development of human capital in rural and coastal areas.
2. Supply of internal market with safe quality products of Mexican origin.
3. Improvement of farmers' income by elevating their presence in global markets, integrating them into value aggregating processes and the production
of bio-energy.
The livestock sector programme set by SAGARPA for 2010 amounts to
MXN11,000m: MXN5,302m (48%) is earmarked for beef and dual-purpose cattle, and MXN1,481m (13%) for dairy cattle. Appendix 3 provides the allocation
of funds per production system and type of programme. Programmes for beef
and milk production aim at:
29
30
1. Stabilising producer prices
The Stabilisation Fund for the marketing of milk to buffer temporal oversupply of milk to a maximum of MXN1 per litre of fresh milk, with a maximum of 15,000 litres per day per beneficiary through the milk processor
(SAGARPA, 2008).
2. Improving productive assets
Programmes are subdivided per sector (agriculture; cattle, aquaculture) and
there is one overall programme for rural development. The programme for
cattle supports improvement and sustainability of forage areas; genetic improvement; strengthening milk collection and processing animal products
and infrastructure investments. The total support to animal production systems for 2010 aims at MXN1,600m for 16,000 projects benefiting 92,000
farmers. Of this budget, MXN613m (38%) is allocated to beef and
MXN487m (30%) to milk and dual-purpose cattle farmers (SAGARPA, 2010).
3. Enhancing sustainable use of natural resources (PROGAN)
This programme focuses on improvement of animal productivity, through the
support of sustainable technical practices of production, technical assistance, capacity building, and financial funds. Beneficiaries are divided into
two categories: category A, in which milk and beef cattle production systems with 5 to 35 animals may receive up to MXN350 per animal; category
B, in which dual-purpose production systems with 36-300 beef cattle receive
up to MXN300 per animal. For milk production systems, category B does
not apply. To beef and dual-purpose cattle, 87% has been allocated, 4% to
dairy, and the rest (9%) to other animal production systems. Almost twothirds (62%) of PROGAN resources will go to category A; one-third (38%) to
category B. PROGAN reaches beneficiaries through the states. Table 2.4
gives an estimate of number of animals that will be supported in 2010.
Progan has a quality programme for smallholder farms (about 5-35 cows/
farm) to improve quality of milk: 'Progan leche' from Sagarpa. In this programme, 26,000 farms in 21 states are registered. They receive MXN375
under the condition that they work on milk quality improvement. Cofocalec
sees improvement in the quality of milk, but the actual quality is still low
(high Total Plate Count (TPC)). This is no surprise as these farms often lack
electricity for e.g. cooling the milk.
The government started collection centres of milk (Centro de servicios
ganaderos). Small dairy farms (with approximately 15-20 cows) can deliver
their raw milk to collection centres where it is cooled. The centres also have
consultants who help the farmers with management of the cows and achiev-
ing better quality of milk. If the centres run well, the government wants to
transfer the centres to the cattle associations (Anaya, 2010).
Table 2.4
Number of supported animals in 2010 in 1,000 heads
Production system
Beef and dual-purpose cattle
Dairy cows
Total
Category A
Category B
Total
4,674
3,655
8,329
396
0
396
5,070
3,655
8,725
Source: SAGARPA (2010).
Examples of programmes targeting the agricultural sector in general are
Alianza para el Campo (Alliance for the countryside) or Soporte. Producers need
to be organised for receiving subsidies. Through the programme Alianza para el
campo the federal government assigns resources, functions and programmes
to the state governments. It has three subprogrammes:
1. Support to rural investment projects;
2. Development of capacities in rural areas;
3. Strengthening of rural enterprises and organisations.
The Soporte programme provides technical assistance and training on different issues, including beef and dairy. The Soporte programme includes agreements between the federal funds and funds for technical assistance of each
state. Third parties may tender for finance by elaborating specific programmes
for the support of the sector. An example is the programme as operated by the
Unión Ganadera de Jalisco (Box 2.1).
An example of an initiative financed by Sedesol is the Centro de Valor Agregado (Centre of Added Value) in Jalisco to develop agro-industry with products
from the state. The Centre is an incubator of new enterprises, for the development and try-out of new food products complying with international standards of
food safety. Ideas are evaluated for their innovativeness, market potential, and
profitability. The most promising ideas will be developed as pilot projects in the
Centre. In a first phase, the Centre will concentrate on fruits, vegetables, meat
and milk products (CVA, 2010).
Stakeholders made some critical remarks on the government policies:
- Farmers receive MXN150 per hectare, some buy seeds, some buy beers,
the government does not control.
- Sagarpa has mainly social programmes, directed at keeping producers in a
margin of comfort
31
Box 2.1
Case: Unión Ganadera Regional de Jalisco
The Unión Ganadera de Jalisco is a second-tier organisation of the CNOG, integrated by
138 first tier regional organisations in Jalisco, of which 22 are organisations of milk farmers
and the rest of beef farmers. There are between 12,000 and 14,000 milk producers. Chapter 8 provides more information on professional organisations. Jalisco is Mexico's biggest
dairy state, yearly milk production is around 1.8m tonnes, produced by 14,000-16,000 dairy
farmers (ranging from 5 to 500 cows). To be a member of the union, farmers need to have at
least 5 cows and pay once MXN150. The Union finances itself with the emission of permits
for the transportation of cattle to slaughterhouse (MXN12 per permit).
With Federal and State finance (mainly SAGARPA: SOPORTE, Productive Assets), the Union executes a programme for the development of the primary dairy sector, which consists of
three parts:
1. Improve the status of the farms. The Union estimates of all farmers, 60% does not have
a milking machine and 25% does not have a cooling tank. The Union assists farmers in
getting subsidy from the government to buy equipment and competitive offers from
equipment companies. The goal is to help 400 farmers every year with a subsidy (2010
is the third year).
The Union also offers technical assistance to achieve better milk quality and improve production. In Jalisco, 37 technicians support farmers. The government also has a subsidy
for this assistance.
The Union concerns about the small and medium producers, because the bigger ones
have more cash flow and can invest in better management.
2. Collect and sell milk for the farmers. The Union is working on a proposal for this. They
want to build three centres for milk collection with subsidy from the SAGARPA-Jalisco.
The centres would have a capacity of 15,000-20,000 kg per day and used by farmers
that do not have their own cooling tank. The dairy producers pay for the services of collecting and cooling the milk. The centres (as non-profit enterprise) also take care of selling the milk to processors and return the profit to the producers depending on amount
and quality of their milk. About 200 farmers deliver milk to the three centres. Their advantage is the assurance of having a buyer, weekly payments and a better price.
3. Build an own industry plant to pasteurise milk and to make milk powder. They already
conducted a market study, designed a plant, they have the budget and an alliance with
two local processors in Jalisco. The purpose is to collect all the milk if the supply cannot
be absorbed by the market at fair prices.
32
-
-
The subsidies by the government are a way to buy 'votes' for the next
election.
Subsidies lead to farmers not knowing their own cost price and getting used
to 'getting' 50% of the money to buy a bull, for instance. In no way does this
lead to more productivity or efficiency of farms. If the subsidy stops, then
they have a problem, because they do not know how to survive without, they
have not learnt anything to improve management. The government should
keep the subsidy and take care of good and fair milk prices.
Farmers in Jalisco also say that the government should stop with the subsidies and make good regulations for fair milk prices. The amount of subsidy
per farmer in Jalisco is only MXN0.03 per kg of milk and this is not enough
to keep them all in business. Subsidies are seen as 'bread to live' and not as
'a loan to improve production'.
The programmes above suggest many efforts to enhance the capabilities of
farmers and of the infrastructure of the dairy supply chain. The OECD publishes
the level of producers' subsidies for several countries. A Producer Support Estimates (PSE) of 20% means that the estimated value of transfers to individual
producers from consumers and taxpayers is equivalent to 20% of gross farm
receipts (OECD, 2010). In most years, almost all the subsidies are related to
output. Only in 1996 to 2002 less than 2% of the subsidies are allocated to 'on
farm services': an input use based support. Appendix 4 shows detailed information on the PSE for the Mexican milk producers. Figure 2.3 shows the PSE for
Mexico and benchmark countries. New Zealand has a negligible PSE over 20
years. The other selected countries reduced the subsidies in the nineties and
even more since 2005: the PSE dropped from above 50% to below 20%. The
subsidies in recent years have been largely abolished in most countries.
33
Figure 2.3
PSE: subsidies on milk as percentage of farm receipt
PSE %
100
80
60
40
20
0
EU-27
Mexico
N-Zealand
USA
Source: Based on OECD Database 1986-2009 Producer and Consumer Support Estimates.
34
Brazil
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
-20
3
Dairy production and trade:
an international benchmark
Key findings
-
3.1
The Mexican raw milk production (10.8m tonnes) is slightly below the Dutch
production (11.3m tonnes).
The average yield per animal (5,000kg) is on a fair level compared to most
benchmark countries.
The total national milk production growth (1.9%) is just below world average
(2.2%) and above the Dutch level (0.4%).
Mexico is a net importer of dairy products (45% milk powder). USA supplies
over 55%. Self-sufficiency of raw milk is around 70%.
Mexico imports 2% of their dairy products from the Netherlands, mainly
cheese (USD27m).
Benchmark countries and self sufficiency
This chapter provides an overview of the Mexican dairy industry compared to
benchmark countries. Section 3.2 deals with the production and consumption,
Section 3.3 with the trade developments.
The benchmark countries are trade partners of Mexico or important producers in Central- and South-America. Table 3.1 provides the key figures of the selected countries. Mexico ranks number 16 as world producer of cow milk, with
a share of 2% of the world production. The cow milk production in Mexico is a
little below the Dutch production, despite a population that is seven times the
Dutch. Mexico is world's tenth important importer of dairy products and has a
negligible export of dairy products. A first opportunity for the Mexican dairy industry might be to substitute the imports by domestic production.
Mexico produced almost 11bn litres of milk but consumption amounts
around 15.6bn litres, resulting in imports of approximately 5bn litres of milk and
dairy products indicated by low self-sufficiency indices for butter and milk. The
Mexican milk production covers about 70% of the total volume of raw milk required to satisfy the domestic demand. This gap tends to widen, due to higher
growth rates of dairy consumption market compared with the growth rate of
milk production. The consumption developments are discussed in Chapter 7.
35
Table 3.1
Cow milk production and trade in dairy products in 2008 and
Self@sufficiency in 2007
Country
World
Import
Export
1,000 tonnes USDm
Production
USDm
Self@sufficiency a) %
Butter
Milk
578,450
56,329
64,601
100
100
86,179
1,680
2,994
100
99
Brazil
27,752
212
509
104
101
New Zealand
15,217
75
6,563
1,074
553
Netherlands
11,286
3,189
6,908
239
146
Mexico
10,766
1,470
91
25
79
Argentina
10,500
20
812
153
118
Australia
9,223
538
2,208
156
170
Belgium
2,805
3,520
3,451
114
94
Chile
2,550
84
221
106
113
Uruguay
1,576
8
430
475
182
USA
a) Domestic supply to consumer in percentage of domestic production.
Source: Own calculations based on FAOstat and UN Comtrade.
3.2
Dairy production and yields
Mexican growth of cow-milk production is below world average. Brazil, Argentina, and Chile have much higher growth levels, because of a growth in the
number of dairy cows and a growth of the yield per animal (Table 3.2). The
Netherlands and Belgium have low growth rates, due to the quota system of the
EU Common Agricultural Policy. The average yield per animal in Mexico
(5,000kg) is high compared to Brazil (1,300kg) and Argentina (4,800), two
large producers in the region. USA (9,300) and the Netherlands (7,700) have
significant higher production levels. The yield growth per animal (2.1%) is above
the level of Brazil (1.9%) but below Argentina (3.1%) and relatively high compared to most other benchmark countries. Appendix 5 provides data for the period 1998 to 2008. Chapter 5 shows that yields in Mexico vary between 700
and 9,000kg per cow.
36
Table 3.2
Country
Dairy production in 2008 and annual growth 2003@2008
Production
Dairy Cows
Yield/animal
1,000 tonnes growth % 1,000 heads growth %
kg
growth %
246,862
1.2
427
-1.0
2.2
9,224
0.3
9,343
1.9
3.9
21,198
1.9
1,309
1.9
15,217
1.2
4,348
2.1
3,500
-0.9
Netherlands
11,286
0.4
1,466
-1.1
7,698
1.5
Mexico
10,766
1.9
2,153
-0.2
5,000
2.1
Argentina
10,500
5.1
2,200
1.9
4,773
3.1
Australia
9,223
-2.2
1,728
-3.4
5,337
1.2
Belgium
2,805
-3.8
500
-2.2
5,610
-1.6
Chile
2,550
3.7
1,725
3.5
1,478
0.1
Uruguay
1,576
0.9
950
1.6
1,659
-0.7
World
578,450
2.2
USA
86,179
Brazil
27,752
New Zealand
Source: own calculation based on FAOstat.
Appendix 6 provides the production and price for each administrative zone.
The zones Jalisco (1,861m litres), Coahuila (1,365m litres), and Durango
(1,037m litres) in the middle of Mexico are the regions with the largest production. These areas have a good infrastructure of roads, communication, and
electricity. The price of milk between the regions shows some variation: the average is MXN4.32 per litre whereas the price is above MXN7 per litre in the
Federal district and in Baja California Sur and in Colima (near Mexico City) just
below MXN7 per litre.
3.3
Import of dairy products by Mexico
The Mexican import growth of dairy products (14.1%) in the period 2001-2003
to 2006-2008 is higher than the world average (12.7%). Concentrated milk and
cream (powder) accounts for 43% and cheese for 26% of the total value of imports by Mexico. The USA supplies 57% of the total dairy imports by Mexico.
The USA is for many dairy products the largest supplier, and has an above average growth rate. However, Uruguay got a large share in the imports (60%) of
the category buttermilk, yoghurt: since 2004, Uruguay doubled its export value
in this category each year. New Zealand supplies 60% of the butter and 26% of
the concentrated milk and cream. New Zealand's growth rate in the Mexican import is below average. The Netherlands has a share of a mere 2% in the imports
37
by Mexico, mainly cheese. Countries in the region have the highest import
growth rates. Appendix 7 and 8 provide detailed information on shares and
growths percentages.
Table 3.3
Import of selected products by Mexico in USDm
(average 2006@2008) and growth 2001@2003 to 2006@2008
in %
Milk & cream,
Whey
Butter
Cheese
Total
concentrated
HS@code
402
404
405
406
World
591.2
219.7
149.3
311.7
1364.8
14
USA
355.3
196.9
18.4
160.0
774.9
25
0.6
25
153.8
10.5
89.0
25.0
283.5
10
Brazil
New Zealand
Netherlands
0.1
0.1
0.8
26.8
27.8
8
Argentina
19.6
1.6
5.2
4.3
31.8
-3
Australia
8.7
3.0
8.8
0.3
21.0
-6
Belgium
Chile
Uruguay
Source: UN Comtrade.
38
0.6
Growth
16.8
3
31.3
1.7
0.1
15.1
0.9
51.6
85.4
35
5.3
0.3
4.5
32.0
82.4
19
4
Suppliers to the dairy chain
Key findings
-
-
-
-
4.1
Only 2 to 3% of the farms use Artificial Insemination, according to stakeholders 95% on the large farms.
Milk production control per cow is almost not practiced in Mexico and hampers proficient farm management and breeding. Large farms seem to use
milk production control.
Farmers own 65% of the processing capacity of concentrate feed.
Credit facilities, largely supported by the government, offer soft loans
and/or subsidies. This did not improve the position of farmers. Lack of sufficient capital and interest rates up to 14% are threats for the dairy farmers.
The perception of high risks and low return, not in line with the reality,
and farmers' attitude (loans are subsidies) do not improve access to credit
facilities.
Mexico allows the use of BST to increase milk production. Some processors
do not accept BST-milk.
The import of vaccines for veterinary medicines from the Netherlands is below 10% of the total imports: the USA supplies over two-thirds.
Mexico has public and private standards for milk quality. Several initiatives
focus on improvement of the quality.
Using milk machines and cooling tanks is related to the conditions and support of the processors.
The main trade partner for machinery is the USA. Mexico imports a negligible amount of machinery from the Netherlands.
Breeding
In 2008, Mexico imported USD20m of bovine semen, mainly from the USA
(67%) and Canada (17%). The import from the Netherlands (3%) increased from
around USD150,000 end nineties to over USD400,000 in the last 5 years, with
an all high in 2008 of USD589,000. Figure 4.1 shows that the imports from
France (5%) and Spain (4%) are still higher than from the Netherlands.
39
Figure 4.1
Import of Bovine Semen (HS code 051110) by Mexico in USDm
Import Bovine Semen (million USD)
25
20
15
10
5
USA
Canada
France
Spain
Netherlands
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
0
Rest of World
Source: Own calculation based on UN Comtrade database.
40
Imports of semen, as in the case of other animal genetic products like embryos, are subject to a high level of risk analysis before these products can actually be imported. After having verified the zero-risk of these products, the
Mexican veterinary authorities issue a list of import requirements that involve
country of origin, procedures, testing, and other health specifications. This
hampers maintaining a market position, as rules change according to the country's animal health status, additional requirements from the authorities and
country-to-country negotiations and agreements. As an example: veterinary reasons prevent import of semen from Brazil, although the cross breeds would fit
perfectly in the tropical areas of Mexico (Reproducción Animal, 2010). The market is not really growing; the number of cows is stable, which results in a fierce
competition between companies. The largest competition in semen is from national bulls, not tested in official breeding programmes and therefore without official breeding values. Owners of the bulls promote their bulls with data on the
production of the daughters. This seems to work, because they have a great
share of the market in semen. Farmers tend to have more belief in these bulls
than bulls from outside the country. Although these bulls lack official breeding
values, they can have good quality daughters. Reproducción Animal (2010) estimates that from all semen for AI, 50% is national and another 50% is imported.
The use of Artificial Insemination is not a common practice yet on all farms. If it
is used, then it is only for dairy cows, not for beef cattle. The Union from Jalisco
estimates that Artificial Insemination is only practiced on 2-3% of the farms
(mainly large farms). Small farms often do not see the advantages of artificial
insemination with semen of high genetic quality. The specialised dairy farmers
(with good infrastructure, equipment, and management) used to select only for
milk production, because milk processors are used to pay for volume of milk.
Recently they started to require a minimum level of protein. Productive life, calving ease, and fertility are getting more important. What is needed to increase
the use of Artificial Insemination/good genetics is awareness among farmers of
the benefits, confidence in genetics and good infrastructure to provide full service at any time (Reproducción Animal, 2010).
Box 4.1
Reproducción Animal
One of the importers of bovine semen is Reproduccion Animal (a full Mexican Company
founded in 1972). The strategy of Reproducción Animal is to promote healthy and profitable
cows for commercial farms. It has distributors all over the country that deliver semen at dairy
farms. RA imports semen of different breeds, especially Holstein, but also e.g. Swedish red,
Fleckvieh or Montbeliarde for crossbreeding. Semen is imported from the USA, the Netherlands, Germany, Sweden, and France. Reproducción Animal is a distributing agent for Cooperative Resources International (USA); CRV (Netherlands), Viking Genetics (Sweden, Denmark,
Finland), München Grub (Germany); AmBreed (New Zealand) and Coopex (France), among
others. Reproducción Animal gives advice for animal reproduction strategies for milk or beef
cattle, using semen according to the different regions. Cows are examined for their physical
traits (not health), before being recommended to a specific bull. Reproducción Animal also
sells (increasingly) sexed semen. The market for embryos is very small. They sell most semen in La Laguna in the Coahuila region.
In the Netherlands milk production control at the level of an individual animal
is widely accepted and seen as a useful tool to monitor all kind of management
aspects like feeding or breeding. In addition, these data can be used to estimate breeding values of bulls. According to Reproducción Animal, the government says that 300,000 dairy cows are in milk production control, but they
estimate this is only 40,000. The reason for this low participation in milk pro-
41
duction control is that farmers are not interested in sharing data. The specialised farmers are satisfied with data on milk production from their own milking
parlour computer and the results of bulk tank composition. Furthermore, taking
part in milk control is expensive (Reproducción Animal, 2010).
4.2
Feed industry
The National Council of Manufactures of Concentrates and Animal Feed registered 152 commercial (specialised) industry units, selling to third parties representing 35% of the national manufacturing capacity of 32.5m tonnes. The
second type is cattle farmers with proper infrastructure to produce animal feed.
The National Council registered 258 units of this type, representing 65% of the
national processing capacity. The industry generates 42,000 direct jobs. The
industry has an overcapacity: only 75% of the available processing capacity is
used. Smaller plants of organised farmers that do not possess advanced technology are first out if business. In 2004, the total value of inputs was
MXN25,000m, mainly cereals and seeds.
Of all forage grains in feed, 60% is imported; of which the main part (62%) is
maize, followed by sorghum (31%). México is a large producer of white maize,
but yellow maize has to be imported. The same goes for oilseed cakes, over
90% is imported. In 2006, 2.4m tonnes of feed was used for cattle breeding,
and 4.2m tonnes for dairy production. Per 2008, import tariffs in NAFTA for
maize became zero.
Main feed inputs used by two subgroups of production systems (see Chapter 5) are shown in Table 4.1.
Table 4.1
Percentage of the type of feed used by farm types
Feed type
smallholders
specialised
Maize
31
24
Agro industrial by-products and others
36
30
Commercial concentrates
Total
Source: Espinoza Ortega et al. (2005).
42
Farm type
33
46
100
100
Box 4.2
Prolea (Productores de Leche de Acatic)
Prolea is a cooperative of farmers in the state Jalisco founded in 1991. Members of the cooperative are 552 farmers. Prolea has 4 departments:
1. Selling and processing of milk. Prolea produces 54,000l per day (2004), and sells to different buyers, according to the quality of the milk;
2. Feed. They buy ingredients and mix their own concentrates for dairy cows in a small
plant. The purpose is to make the cheapest but best feed for dairy cows. Their prices are
30% below market level. Non-members pay a slightly higher price than members do.
Besides own feed production, they buy ingredients for feed. A nutritionist helps mixing
the concentrates. They also import African grass seeds to increase grass production and
therefore milk production;
3. Agriculture. Prolea also offers agricultural contractor services to harvest corn and
grain. In 1991, the first joint cooling tanks were installed with soft loans from Lechera
de Guadalajara;
4. Rearing calves.
Furthermore, the cooperative supplies credit, extension services and health care to its
members.
Feed accounts for the largest cost in production systems (see Table 4.2,
Chapter 5 provides information of all costs). Differences in costs result from a
large use of maize by the smallholders group while the specialised group uses
more concentrates that are commercial.
Table 4.2
Impact of maize 60% price increase on production costs of
Mexican livestock
Product Forage
Feed costs/
Forage grains/
Increase
Impact on
grains a)/
total produc@
production
of forage
production
feed costs
tion costs
costs
grains
costs
Milk
40%
65%
26%
60%
15.6%
Poultry
65%
62%
40%
60%
24.2%
Eggs
60%
55%
33%
60%
19.8%
Cattle
65%
60%
39%
60%
23.4%
Pork
72%
56%
40%
60%
24.2%
a) Mainly maize and sorghum.
Source: PROLECHE (2007).
Not only milk production but also livestock production will be affected by higher
maize prices (an important forage grain). Table 4.2 gives the percentages of
43
cost variations in different Mexican livestock industries due to a rise of 60% of
forage grains. It shows that the impact is smaller for dairy than for chicken meat
and pork. The Union of Jalisco estimated that feed has a share of 60%-65% of
the cost price, which is in line with the 65% in Table 4.2.
4.3
44
Credit facilities
Some organisations to finance the development of the agricultural sector are:
1. Financiera RuralFinanciera Rural Mexico's rural government agency started in
2003 aiming at improving the quality of life by in increasing productivity and
profitability in rural areas. Financiera Rural provides loans and services in the
field of training, advisory and technical assistance. In 2007 Financiera Rural
lent MXN17,038m and in 2008 MXN26,398m. Financiera Rural grants credit
to individual rural producers and entrepreneurs and rural financial intermediaries through 97 branches located throughout the country
(http://www.financierarural.gob.mx/).
2. FIRA (Trust Funds for Rural Development)
FIRA is a development bank that offers credit for fixed assets, as working
capital and for supporting services. The supporting activities involve capacity building, advice, demonstration, and enhancing organisational capacity
(in the form of vouchers to producers). In 2008, FIRA granted MXN16,054m
credits to the livestock sector, an increase of 23% compared to 2007. Cattle took MXN11,279m (70%) of the total.
3. FOCIR (Capitalisation and Investment Fund for the Rural Sector)
FOCIR is a governmental institution created in 1994 to promote investment
in the rural and agribusiness sector. In 2008, it changed from a public trust
fund to a specialised financial agent. The federal government, state governments, and the private sector are shareholders. Financial instruments offered by FOCIR vary from stop-loss programmes to long term financing
programmes for small and medium enterprises, as the Ministry of Economy's Development Programme does.
FOCIR developed the Agribusiness Capital Investment Fund (FICA), a trust
fund with mixed capital participations through cash deposits made by both
state and federal governments, as well as private investors. FICA focuses on
financing between USD4m and USD10m. Ministries of Agriculture and of
Economy programmes offer loans below USD4mfor the agricultural sector.
4. Nacional Financiera, S.N.C.
NAFINSA is a Development Bank, channelling its funds mainly through com-
mercial banks and non-banking financial intermediaries. The principal
sources of NAFINSA are loans from among others the International Bank for
Reconstruction and Development, the Inter-American Development Bank,
foreign banks, and securities. NAFINSA targets small and medium-sized enterprises (SMEs) to provide better access to financing and other assistance
schemes. In 2008, NAFINSA's private sector loan portfolio was
MXN101,853m.
5. Credit Unions
Credit unions facilitate loans, credits, and guarantees for their members.
Companies, like Lala and Alpura (see Chapter 6) have their Credit Unions,
and channel resources mainly from FIRA through commercial Banks to their
members. For instance, the industry Group Lala operates the Unión de
Crédito Industrial y Agropecuario de la Laguna. In the third quarter of 2009,
their portfolio involved MXN2,582m in outstanding loans and MXN782m in
liquidity (FitchRatings, 2009).
6. Another source of finance is the programme 'Alianza para el campo' (mentioned in Section 2.2) which helps to balance the decline of credit assigned
to the sector. These subsidies have had an impact specially on provisioning
milking and cooling tanks.
During the fact mission stakeholders expressed the following opinions. Lack
of sufficient capital for the primary agricultural sector and interest rates up to
14% are some threats for the dairy farmers. The perception of high risks and
low return is not in line with reality. This does not improve the credit facilities.
The large companies in the food industry (e.g. Lala, Alpura or Sigma) have a
better access to capital. The foundations by government of banks like FOCIR or
FICA have apparently not improved the position of the farmers. The farmers can
also partly be blamed for their weak position. They consider credits from the
government as a subsidy and they do not consider profitability if they solicit for
a loan.
4.4
Animal health
Mexico, as the USA, allows legally the use of BST (Bovine Somatotropin or bovine growth hormone). However, it is 100% forbidden in several other milkproducing countries like Canada, Australia, New Zealand, Japan, and Europe.
In the United States, concern about potential side effects has slowly grown,
with a number of products and retailers now becoming BST-free. In Mexico on
45
average 35-40% of the farmers, especially small farms that produce around
400-500kg per day, use BST to increase milk production (Nestlé, 2010). By use
of BST the milk production can increase with 10%. Some processors do not accept BST milk. The profitability of BST became not clear.
Mexico imports in 2006 to 2008 around USD50m of Vaccines for veterinary
medicine (HS code 300230), mainly from the USA (68%). The 10-years average
of the import from the Netherlands is USD3.5m. These imports fluctuate with a
peak of around USD5m in 2006 and 2007. Figure 4.2 shows the foreign suppliers of vaccines for all livestock.
In the North, there are still problems with Tuberculose and Brucellose. In
the tropical areas and in South and Central Mexico this is not a problem (Nestlé,
2010). Mexico is free of foot and mouth disease.
Figure 4.2
Imports of Vaccines for veterinary medicines by Mexico
France
7%
Spain
3%
Rest of world
4%
Netherlands
8%
Italy
10%
USA
68%
Import of vaccines (USD52m 2006-2008)
Import
of vaccines (52 Million USD 2006-2008)
Source: UN comtrade.
4.5
Milk quality control
Milk quality control is performed at lot level (e.g. milk tank) and differs from milk
production control as mentioned in the section on breeding. The official standards for product safety are established under the NOMs (Norma Oficiales
Mexicana), elaborated by the Federal Ministries. These norms are equivalent to
the European Union Directives but differ in requirements and levels. Each prod-
46
uct must be tested according to the national, mandatory NOM standards by an
accredited Mexican laboratory.
Examples of NOMs for milk products are (Gain, 2009):
- NOM 120 applies to processing milk;
- NOM 155 applies to finished milk product;
- NOM 251 will apply to HACCP requirements, which until now, contrary to
the European Union, are not mandator;
- NOM-243 will soon be published and refers to the labelling of milk products;
- Cofocalec (Consejo para el Fomento de la Calidad de la Leche y Sus
Derivados, A.C.) has certified final milk products of Alpura (12), Pasteurisadora Aguascalientes (3), La Concordia (7) and Lechera de Guadalajara (2),
12 other products are in process of certification. These are voluntary certifications. For the list of products, see www.lactodata.info/lactodata/
lactodata_calidad.php?menu=calidad
Besides the NOM, there are NMX (Normas Mexicanas) which are voluntary.
As the NOM are mandatory by law, the NMX may be more stringent than the
NOM, but not less. The NMX are elaborated by the COFOCALEC, the Mexican
Standard NMX-F-700 as elaborated by COFOCALEC in 2004, which establishes
the physical, chemical and hygienic specifications, as well as methods for
analysis of raw cow milk. COFACALEC's laboratory in Lagoa de Moreno conducts raw milk analysis for 5 processors.
A third category of standards concerns the 'Pliego de Condiciones' (Standards specifications). These tend to be stricter than NOM or MNX. An example
are the standards as have been set for milk certified under the certification
scheme Mexico Calidad Suprema, which apply to food safety, intrinsic product
quality and information to the consumer (labelling). Mexico Calidad Suprema is a
joint initiative of the Ministry of Agriculture; Ministry of Social Development and
Bancomext to promote Mexican export products. WalMart has accepted Mexico
Calidad Suprema certification for its purchases since 2007. Sagarpa subsidises
50% of Mexico Calidad Suprema certification through its programme Soporte.
47
Box 4.3
Quality control at farm level: Lechera de Guadalajara
Every farmer who delivers milk to Lechera de Guadalajara has a cooling tank of at least
1,000kg per farm. In total 700 farmers, deliver a total volume of 1.1 to 1.4m kg of milk.
Quality standards exist for fat, freezing point, sediments, taste, Total Plate Count (TPC)
(<100,000 CPU) and antibiotic residues. There is no standard for Bulk Milk Somatic Cell
Count (BMSCC) yet, but they want to set this at <400,000 cells per ml (now 70% is below
700,000 cells per ml). A milk sample is taken from every delivery and once a week the raw
milk is (randomly) tested for these standards. Antibiotic residue is tested every delivery
(35,000kg milk from 16 farmers). Lechera de Guadalajara does not have a quality control
programme for the production of milk at the dairy farm, but they do have regulations in the
payment scheme. The requirements are: some specifications for the milking place, participation in the governmental programme for Tuberculosis and Brucellosis, good road conditions,
electricity, availability of a veterinarian, water, milk room, pest control, control of medicines,
control of purchased feed, equipment in line (no hand milking). The driver of the milk truck
does some quick checks for temperature, alcohol test, and cleanliness of the tank. Lechera
de Guadalajara takes care of maintenance of the tank and the farmers need to take care of
the cleaning of the tank. If Lechera de Guadalajara sees a quality problem on a farm, they offer technical assistance and help the farmer to solve the problem by taking milk samples and
hygiene measures.
Source: Lechera Guadalajara (2010).
According to Cofocalec (2010) quality standards that processors use are internal company standards. Quality is often attached to price, so they want to
keep their own policies and make their own decisions. The policies are quite different between processors and they change between seasons. In winter/spring,
when there is a lack of milk, the price of raw milk goes up and standards almost
disappear, because they want all the milk they can get. In summer, they use the
higher international standards because they want to be able to reject more milk
because there is peak in the supply. Canilec (2010) says that processors work
all with the same quality standards and their opinion differs from Cofocalec.
Quality control is difficult to enforce. Profeco (Procuraduria Federal del
Consumidor, the consumer protection agency), checks food according to
over 200 norms, but has only one laboratory and limited human resources
(Cofocalec, 2010). According to Cofocalec antibiotic residues are a big problem. Farmers were not used not-delivering milk from treated cows during the
withdrawal period, causing residues in milk. Of the 300-500 samples, Cofocalec
analyses every week, about 15% contains antibiotic residues (Cofocalec, 2010).
48
Canilec (2010) estimated that 40% of total milk is of a good quality; 35% of a
medium and 25% is of a low quality, according to the Mexican standards.
No NOM for raw milk exists, but a voluntary standard, the NMX 700/730.
Up till now, only 50 ranches are certified according to NMX 700/730. They all
deliver their milk to a processor in Aguascalientes who promised a bonus of
MXN0.08 per kg if the farm is certified. For the farmers the bonus was the trigger, but after being certified, the production process got more efficient and
they got more insight in prevention of losses and in quality. Therefore, although
it costs money and time, the bonus and efficiency increase made it worth
(Cofocalec, 2010).
4.6
Machinery and equipment
No formal information on the presence of milking and cooling equipment on
dairy farms could be retrieved. The impression is that many small farms do not
have such technology. If they cannot deliver their milk to a processor or collection centre, they will often sell the not cooled milk to small local cheese makers
often at a lower price. Some small farms make artisan cheeses themselves and
sell it at local markets. Some farms share a cooling tank, and sometimes they
can deliver the milk to collection centres in the neighbourhood.
During the mission, we got some estimates about equipment on dairy farms:
- Of the 4,500 farms that sell the milk to Nestlé, the second largest processor, 90% have a milking machine and cooling tank. The others share cooling
tanks with e.g. family members. Nestlé only buys cooled milk.
- Prolea, a small processor/cooperative in Jalisco, says 95% of their (approximately 200) dairy farmers have a milking machine. The milk of the farms
that do not have a cooling tank is used for cheese production.
- In the state of Jalisco, the Union estimates that 60% of the 14,000 to
16,000 dairy farms (ranging from 5 to 500 cows) does not have a milking
machine and 25% does not have a cooling tank. Farmers can get subsidy
from the government to buy equipment. The Union helps them getting the
subsidy, and work on good jointly offers from equipment companies (Union,
2010).
- The bigger farms with well-equipped milking parlours also have electronic
milk production registration.
In order to meet quality standards in the future it will be necessary to cool
the raw milk after milking, either on the farm or in collection centres. Second,
49
as milk production and farm size increase a milking machine will be the next
necessary investment.
All technology that is imported from Europe into the USA is also available in
Mexico. For example, milking equipment is often sold by Westfalia and Delaval
(Union, 2010). Table 4.3 distinguishes five categories of imports of machinery:
1. Milking machines (UN comtrade code 843410);
2. Dairy machinery, excluding cream separators (UN comtrade code 843420);
3. Parts of milking machines & dairy machinery (UN comtrade code 843490);
4. Harvesting and grading (UN Comtrade code 8433). Harvesting or threshing
machinery, including straw or fodder balers; grass or hay mowers; machines
for cleaning, sorting or grading eggs, fruit or other agricultural produce;
5. Soil cultivation (UN Comtrade code 8432). Agricultural, horticultural or forestry machinery for soil preparation or cultivation; lawn or sports-ground
rollers.
The selected countries are the Netherlands and countries, which have at
least for one category a share in the imports of 5%. The main supplier is the
USA for most products. The Netherlands has a share of 1% in the categories
harvesting/grading and soil cultivation. Almost all other selected countries outperform the Netherlands in all categories. Germany is an important supplier of
dairy machinery.
Table 4.3
Imports of agricultural equipment average 2006@2008 in
1,000 USD
Country
Milking
Dairy
machines
machinery dairy machinery
Harvesting/ Soil
grading
cultivation
World
5,183
15,335
3,619
197,900
47,655
USA
1,386
2,482
1,685
146,734
26,930
623
6,562
435
10,977
291
11,665
2,918
Germany
Brazil
Italy
65
9
852
332
4,635
4,544
1,187
35
1,459
5,940
125
25
2,360
403
73
1,762
193
5
31
1,126
4
197
164
2
France
Netherlands
Sweden
New Zealand
Source: UN Comtrade.
50
Parts of milking and
Stakeholders said that the average age of Mexican agricultural equipment
increased dramatically over the last 30 years. Industry experts estimate that it
has increased from 17 years in the 1970s to 25 years in the year 2005. As a
direct result, the parts and servicing market has grown. Mexican farmers tend
to be conservative and reluctant to change. Post-sales service is a key factor to
purchase decisions because of the extended life of machinery. This has contributed to the success of American brands that benefit from large well-established
distribution networks (US Commerical Service, 2005).
51
5
Structure and performance of
dairy farms
Key findings
-
5.1
52
Mexico's dairy farms range from small 'backyard' to large state-of-the-art
operations.
The milk yield per cow ranges between 700 to over 9,000kg per cow.
Milk deliveries show a seasonal supply pattern, stronger than in
the Netherlands.
Farm gate prices of Mexican milk fluctuate below the price in the USA.
Farm management is seen as a major weakness. Practical training is important, but poorly available.
Feed management and roughage production and preservation can be
enhanced.
Maize is an important feed, feed costs are 60% of the milk cost price.
Poor management in rearing young livestock.
Stakeholders expect a production growth at better-managed farms.
Veal production as in the Netherlands is no opportunity in Mexico: consumers do not know such meat and production resources have better
opportunities.
Structure
Mexico's dairy farms range from smallholder or 'backyard' to large state-of-theart-parlour-free-stall farms. Most authors recognise three dairy farming systems
(Dobson and Jesse, 2009). Mexico lacks good data on the number of farms, the
number of cows and milk production. There are an estimated 1m Holstein cows
in Mexico (Reproducción Animal, 2010). Besides, there will be many non-specialised cattle, especially on small family farms. During the fact-finding mission, it
appeared that most people use the distinction in region to describe farm types.
Below are some characteristics of the farms in the regions, mentioned by the
stakeholders.
1. Specialised, intensive, or confined production systems
The leading dairy area in México in terms of farm size and technology is
situated in the area of La Laguna, on the border of the Mexican states of
Coahuila and Durango, with very big high-tech farms (500 - >1,000 cows),
which grow alfalfa and corn for feed. In La Laguna the average milk production per cow can reach 9,000kg per lactation, some individual cows over
10,000kg. The production is very efficient, they often milk three times
a day. Most of the farmers of Alpura and Lala are located in La Laguna.
These systems are very similar to the specialised, intensive dairy systems in
the USA. They use high technology, have high yields, import a big part of the
inputs, have mechanical milking systems, use forage feed, have cooling systems, and skilled labour. Nearly all milk is sold through the formal marketing
chain. Most producers are members of full-service cooperatives that not
only process their milk, but also supply inputs and services.
2. Dual-purpose systems
They sell beef and milk, use local resources, and are regional providers.
These are found mainly in the coastal range of the Mexican Gulf ((Tamaulipas, Veracruz) and Chiapas. Most farmers have crossbreeds that are more
suited to the tropics (Brownswiss, Montbeliarde). The average milk production per cow is 700-1,000kg per year. Milk from these farms typically will be
marketed during periods of high beef prices, as these farmers tailor their
output in response to both beef and milk prices. Most milk is sold on the informal market. In the Northern coastline there are also some big farms with
crossbreeds, but management lacks, they do not use their sources efficiently (Reproducción Animal, 2010). According to Nestlé (2010) the increase in milk production is very slow, because of the limiting land and cow
production; the grasses do not offer enough feed for more cows or increased production. However, the tropical areas produce milk efficiently with
low cost of production according to Nestlé. Rabobank (2010) thinks that
dual-purpose farms should invest in optimising grazing systems and breeding. They are lagging behind because they are not part of a formal structure
like a cooperative, they are not integrated in a value chain, and they have a
lack of infrastructure like cooling. Nevertheless, there still will be a future for
the dual-purpose farms in rural areas.
3. Semi-specialised or smallholders also called family and sometimes 'back-
yard' because the cows are held in corals or in the backyards of the houses
(in case of very small farms)
This production system does not have the genetic quality of the specialised
systems but it is considered of good quality. The feed is grass, forage and
crops grown by the producer; it is characterised by high costs and low profit
margins (Nava et al., 2005; Palacios Muñóz, 2002). Investment in equipment is minimal and the farm family provides most labour (Dobson and
53
Jesse, 2009). In Jalisco the milk production per cow on average is 4,0004,500kg per year. Farms have good genetics in this region, but good management is lacking. They spend most money on semen and farmers like to
go to dairy shows (Reproducción Animal, 2010). In this area, the centre of
Mexico, there is a pressure on agriculture and labour. Farms that are not integrated and that do not meet the quality standards, will have difficulties in
the future (Rabobank, 2010). Those farms must become more efficient and
of better quality.
Table 5.1 gives the main figures of each production system and Figure 5.1
presents the three different supply chains.
Figure 5.1
Three most common dairy supply chains
Supermarkets
Big
cooperat
ive
corporati
ons (Lala
and
Alpura)
Markets
Convenience
stores
Nestlé
Large sized
processors
at national
level
Medium sized
processors at
state level
Dualpurpose
productio
n system
Unchilled milk.
54
Chilled milk.
Local
cheese
makers
Liconsa
Small
coopera
tives
Confined
/specialized
dairy
production
system
Informal
market
Home
consumption
Semispecialized
dairy
production
system
Familiy /
backyard
dairy
production
Table 5.1
Main characteristics of dairy production systems for three
dominating dairy farming systems
Characteristics Intensive specialised
Dual@purpose
Semi@specialised
(milk and beef)
(smallholders)
25-50%
20-30%
30-45%
Average herd
Around 100-500 and
Around 40-80
Around 5-100
size, number
more
17%
60% (75% Dobson and
23%
From 4,000 to 9,000
Below 1,200
From 1,800 to 4,500
2-3 lactations
7-8 lactations
5 lactations
Main regions
Northern states
South and tropics
Central states
Main feed
Alfalfa, corn silage
Grazing or forages
Grazing part of the
and concentrates
from cultivated pas-
year, mixture of grains
(20-22 pounds of
tures or native grasses
(11-13 pounds per
Percentage over
national milk
supply
of cows
Percentage over
total cows
Yield
Jesse)
(lt/cow/year)
Productive
life cows
grain per day)
day), corn stover and
other by-products and
forages
Genetics
95% Holsteins
F1 crossbreds,
Holsteins and Brown
Holstein or Brown
Swiss. Lesser genetic
Swiss with Zebu, Criollo potential than specialised farms
Marketing
Production sold
Output is tailored in
Output sold to Liconsa
through the formal
response to both milk
and other processors,
marketing chain,
and beef prices
farm or local cheese
Lala and Alpura
production
Milking and
Milking machines,
Hand milking, regional
Minimal equipment,
cooling equip-
cooling tanks on farm
milk collection centres
often hand milking, few
ment
cooling tanks on farms
Sources: Ávila Téllez (2002); Del Valle Rivera et al. (1997); Dobson and Jesse (2009); Hernández Laos et al.
(2000); Nava et al. (2005); Nicholson (1995); Palacios Muñóz (2002); San Juan et al. (2009) and Canilec (2010).
55
Box 5.1
A large farm: Posta El Cuatro
Posta El Cuatro has 6 units at different places. The unit we visited has 1,100 dairy cows,
produces 32,000kg milk/day and they use BST. Cow production on average is 31kg per day
per cow, milked three times per day. Production per lactation is around 13,000kg. In Jalisco
there are around 5 of these big farms. Compared to the northern regions Torreone in
Coahuila and Chihuahua this farm is medium sized.
Thirty people work at this farm/location; milking (3 x 7 hours) demands almost all labour.
Cows are kept in corals in production groups (from 6-35 days in milk, 35-120, >120 days in
milk) and are fed alfalfa, corn and oat. They grow 20% and buy 80% of the feed. The feed is
adjusted to the group and milk production. All female calves are kept for replacement and the
male calves are all slaughtered at three days old.
They have a formal contract with Danone, including production quota. Besides the
Holstein cows, they also have some Jersey cows (5%) and crossbreds (10%) because
Danone wants a higher fat percentage in the milk. The Holstein semen is from Canada and
Australia. Their largest challenge is to keep the cows in good health. In the raining season,
the cows suffer from udder and claw problems and in December, problems of getting a cold.
Yearly 25% of the cows are replaced.
Mexico produced about 11m tonnes of milk in 2008 from 2.2m cows, which
means 5,000kg per cow according to the statistics of the FAO (see Section 3.2). Other sources indicate around 6.9m cows: this number includes dualpurpose cows that account for about two-thirds of reported milking cows. These
cows produce between 10 and 30% of milk production (Dobson and Jesse,
2009). The milk production per cow has a wide range: from 700kg per cow for
dual-purpose cows to 9,000kg per cow on the specialised dairy farms. Box 5.1
shows that 13,000kg per lactation can be achieved.
About 25% to 33% of the produced milk goes into the informal circuit (IFCN,
2008; Dobson and Jesse, 2009). In this informal market, the milk product quality may be considerably lower than in products sold in the formal market.
Milk production shows seasonality: 6 months of a production below average
and 6 months above. The period of above-average production in Mexico ends
when winter begins and less forage is available. In the Netherlands, the production in the winter is above average. The fluctuation in the Mexican milk deliveries (coefficient of variation 5.0%) is larger than of the Dutch (coefficient of
variation 3.5%).
56
Figure 5.2
Seasonality in milk deliveries (1,000 tonnes) in Mexico and
the Netherlands (average 2006@2008)
1,000
1,000 ton
950
900
850
Mexico 2006-2008
Mexico average
800
Netherlands 2006-2008
Netherlands average
750
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Source: CBSstatline and USDA, 2008 and 2009.
5.2
Economic indicators
Stakeholders mentioned the low prices the farmers receive for their milk, especially compared to the USA. Figure 5.3 compares the farm gate prices of USA,
New Zealand, and the EU with the Mexican prices. From 1999 to 2009, the
farm gate price of the USA was about 10% and of EU around 20% above the
Mexican price. The average price in Mexico in the period 2005 to 2009 was
EUR0.24 per kg. New Zealand's farm gate price is during the 10-year period
75% of the Mexican price. Producers complain about the cheap import especially for milk powder, which indicates a lower performance in Mexico in milk
powder production. The farm gate price differences are except for New Zealand
not an incentive for import by Mexico from these countries, this in contrast to
the opinion of the stakeholders. The below average import growth (Chapter 2)
by Mexico from New Zealand seems related to rise of the farm gate price.
57
Figure 5.3
Farm gate prices (EUR per kg) in % of farm gate price Mexico
160%
140%
120%
100%
80%
60%
40%
1999
2000
2001
2002
2003
USA
2004
2005
New Zealand
2006
2007
2008
2009
EU-27
Source: Calculation based on OECD farm gate price and Eurostat exchange rates.
Prices received by farmers within Mexico vary between regions. In the tropical zones, prices were lower in 2007 than those received by large farmers from
central and northern regions. Quality and lacking sufficient demand from modern processors might be the reason for the low price as mentioned above.
During the fact-finding mission, stakeholders indicated farm gate prices (cost
price + profit) vary between MXN4.00 and 4.40. The indications per litre are:
- North: cost price is MXN3.80, profit is MXN0.60;
- Jalisco: cost price is MXN3.50-3.60 (no external labour). The cost price is
relatively high, compared to the very large farms in the North. They have a
profit of around MXN0.50 on a regular basis;
- Tropics: cost price is around MXN3.00-3.20, profit is around MXN1.20.
The profit depends on milk/beef share, but milk is important for 'every day
money'.
Little information on the cost structure has been found. Section 4.2 indicated that feed costs have a share 65% in the cost price. A study of Álvarez
Fuentes et al. (2004) provides an overview as all costs of the average dairy
farms. The share for feed differs, by the variation (indicated by the standard deviations is high).
58
Table 5.2
Costs and profit indicators for milk production as % of
total costs
Value
Standard deviation
Feed
50.4
28.3
Labour
21.5
21.0
Depreciation of cattle
10.5
10.6
8.5
6.4
11.7
6.4
Financial costs
Other
Total costs
100.0
Source: Álvarez Fuentes et al. (2004).
Table 5.3 presents financial indicators for each of the subgroups. The smallholders group is the least favoured. The dual-purpose group is similar in herd
size and land ownership to the specialised group but with less educated labour,
poorer access to subsidies, technical and management consultancy. The specialised group has the best performance: the gross margin (difference between
sales and direct production costs) is the highest per cow, ha and litre.
Table 5.3
Economic analysis of family systems
Production system
specialised
dual@purpose
smallholders
3,857
1,688
614
Gross Margin per cow (USD per cow)
391
143
122
Gross Margin (USD per ha)
555
176
201
Gross Margin per litre (USD per litre)
0.07
0.029
0.027
Production cost (total) (USD per litre)
0.25
0.27
0.26
Total Gross Margin per farm (USD)
Source: Espinoza Ortega et al. (2005).
5.3
Challenges and perspectives
Several factors propel a growth in production of milk, such as technological improvements, governmental support, and better herd management practices.
Sagarpa plans to increase milk production in Mexico includes actions for infrastructure and genetic improvements, training and technical assistance, farmers
support to improve milking practices and parlours, and to purchase grains, by
advising them in negotiating contract terms (Dobson and Jesse, 2009).
59
60
A major player in the milk industry worldwide has also taken actions to support milk production in Mexico, namely Nestlé that has operated in Mexico for
more than 60 years. Nestlé developed 'districts' in the tropical region of Mexico
to collect milk for its processing plants. These districts enhance the quality and
quantity of the milk, provide technical assistance, and offer micro loans to
farmers that supply their plants (Dobson and Jesse, 2009).
Notwithstanding governmental and Nestlé's actions, national production
growth is affected by financial crisis, non-competitive dairy producers and current droughts (San Juan et al., 2009). Identified sources of low production are
(Ávila Téllez, 2002; San Juan et al., 2009):
- Land tenure problems, which hampers land as collateral.
- Insecurity: thefts, assaults and kidnapping.
- Inadequate development of management practices: low percentage of farmers use an automatic milking system; it is common that foreign systems are
adopted but not adapted to local characteristics, such as climate, maintenance availability and quality, labour, et cetera.
- A low percentage of the cattle is artificially inseminated with higher quality
semen than that of the cattle itself. Therefore, genetic improvement is meagre. Short productive life of the cattle on average is a waste of the genetic
potential.
- Frequent diseases and alterations reduce production levels or cattle's lifetime (tuberculosis, brucellosis, anaplasmosis, babesiosis, fertility problems,
mastitis, ecto- and endoparasites, hoof problems). Mexico is Foot and Mouth
Disease free.
- Poor management in rearing young livestock.
- Livestock is slaughtered at low ages due to lack of productivity and infertility. Breeding investments do not pay off.
- Marketing of inputs has too many intermediaries that increase costs.
- Lack of proper commercialisation channels.
- Imports of sub-products from United States and Canada saturate the market
of fresh milk.
- Problems with sanitation, transportation and processing capacity on fresh
fluid milk.
- Inadequate cold storage and refrigeration infrastructure.
- Lack of facilities to produce milk powder. Supply in the season of abundance
cannot be processed and stored for the season with low deliveries. This results in an increase of imports.
- Lack of professionals in veterinary medicine, animal husbandry and
agronomy.
-
Some entities' practices might have an influence on low production:
- Monopolistic practices of business groups in the commercialisation of
the milk.
- Abolition and reduction of specialised milk producing herds.
- Inaccessible credits to the agribusiness industry.
- Unfair selling prices.
Aforementioned factors do not enhance an increase of the milk production
not at small, but also not at medium sized farms. However, large farms are continuing to make modest productivity gains through improved genetics and herd
management practices (USDA, 2009).
How do stakeholders see the future of the dairy farms?
Farmers need to increase their production to be able to stay in business. This
production growth should be achieved by higher yields per cow and not only by
keeping more cows according to the Union (2010). It is important to increase
milk production efficiently per cow, as there is a water and roughage shortage.
To increase milk yield per cow, the cow demands more energy. Growing and/or
importing corn or grains can achieve this. Also better techniques for feeding are
needed. Nowadays farmers feed the cows during milking, but they should implement feeding outside the parlour so cows have more time to eat. Besides,
they should keep the cows in production groups so feeding can be adjusted to
the stage of lactation.
In addition to the necessary increase in feeding efficiency, farmers need to
make more use of AI and good genetics to improve genetic quality of the herd.
They can make a quick jump forward with the right use of good semen. Farmers
are aware of the necessary improvements, but they do not always have the resources to make investments or changes (Union, 2010).
We asked stakeholders their opinion on the perspective for the different
farm types:
-
Intensive specialised farms
The minimum size in LaLaguna will be above 300-500 cows in order to survive. In Jalisco this is 100 cows nowadays, but will be above 200 cows in
the future. With only 80 cows, they cannot survive (Reproducción Animal,
2010). A farm should produce at least more than 1,000kg per day to be
able to survive if there is no job outside the farm. Besides, farms should be
able to produce 50-60% of their own feed (Nestlé, 2010).
61
-
Dual-purpose farms
Farms with 30-50 cows and no off-farm jobs will not survive (Posta El
Cuatro, 2010). Medium sized farms (around 100 cows) need to make their
own labour more efficient by mechanisation, then they can survive in the future (La Daga, 2010), not with external labour. Canilec also mentioned the
need for more efficiency on medium sized farms. The Union of Jalisco thinks
that part of the medium sized producers may stop, because of the high cost
price. According to the Union 20% of the medium producers stopped in the
last six years, indicating a need for more efficiency.
-
Semi-specialised, smallholders farms
There are many small producers without the required infrastructure and
equipment to produce like the bigger ones. This also affects the milk quality
and as a result the price that is paid for it (Cofocalec, 2010). Some processors work with preferred suppliers and demand cooled, high quality milk,
and of a certain amount. It is difficult for small producers to meet these demands. If small farms cannot deliver to a dairy plant or processor like
Nestlé, Lechera de Guadalajara or Liconsa they often deliver the milk to
small local cheese makers or make artisan cheese themselves for the informal market. The price they get from the local cheese makers however is
lower than the milk price paid by formal processors (Union, 2010). To be
able to live as a family on a small farm they often have non-farm income so
they still can survive and keep producing some milk, also for home consumption. Not integrated farms that cannot meet the quality standards will
have difficulties in the future in selling their milk (Canilec, 2010). However,
although there might be some difficulties in selling milk, the Union thinks that
small producers will remain, because they have low cost of production (no
equipment, pasture feeding). Canilec thinks that the small farms (100 litres
per day) can impossibly live from that profit. They should increase production to at least 300kg per day which is the break-even point for a family to
live from or make sure they get a partly job outside or other income according to Canilec.
5.4
62
Veal production
Male calves born at a dairy farm are often slaughtered at 3 to 10 days old.
The meat resembles the meat of goat and lamb that is very popular in Mexico
(Nestlé, 2010, Prolea, 2010). Some farmers keep the male calves on a plot of
land as a kind of savings account (Nestlé, 2010).
In literature and during the fact-finding mission it appeared difficult to obtain
numbers about veal production. During the fact-finding mission, it was said that
there are a couple of men who raise male Holstein calves to about 500kg. Most
stakeholders shared the same opinion 'meat is just beef!' and 'why raise and
slaughter Holstein calves for meat?' Many people asked that question, besides
they doubt if there would be a market for the meat in Mexico, as people are
used to the 'real beef meat'.
The general opinion is that veal production, as is done in The Netherlands,
costs a lot of money, and the question is whether the margins are higher than
compared to professional beef production. There are already many pure and
crossbred beef cattle. Furthermore, according to Nestlé (2010), there is not
enough feed and water to raise the male calves. Male calves are inefficient in
the production of meat, so the feed and water can better be used for pigs or
poultry.
63
6
Processing industry
Key findings
-
64
The dairy processing industry gives direct employment to 37,000 and indirect employment to 200,000 people.
Over 300 dairy processors are official registered, they use on average 80%
of their production capacity.
Over 2,000, not officially registered, artisanal cheese makers process
mainly uncooled raw milk.
The three larges milk processors - Lala, Nestlé and Sigma- process over
two-thirds of the total milk.
Almost all processors have their own milk quality control system.
Milk powder production does not appear to be attractive: imports are cheap
and there is no period in which Mexico is self-sufficient in milk.
According to 2009 statistics of CANILEC (National Chamber of Milk Processors), the Mexican milk processing industry is formed by 310 formal enterprises
that give direct employment to 37,000 people and indirect employment to
200,000 people. Table 6.1 provides information on personnel and number of
firms for three main types of dairy manufacturers: milk processors and packaging; cream, butter and cheese manufacturers and condensed, evaporated and
powder milk processors. Largest activity in terms of personnel, and production
value is the processing and packaging of milk. However, only 6 firms (1.5% of
the dairy firms) carry out this activity. It is also the activity with the highest capacity usage. 10% of dairy processers are dedicated to manufacture cream,
cheese, and butter. The minor activity of the three in terms of employment and
production values is the manufacturing of condensed, evaporated, and powder
milk. Stakeholders mention that import of milk powder is cheap. From Chapter 3
and 4 we can conclude that Mexico is never self-sufficient in milk. Milk powder
production seems not to be attractive. The remaining 85% of firms are dedicated to manufacturing other milk products. Appendix 9 shows the number of
people directly involved in milk production in Mexico from 1998 until 2008. It
shows a slight but continuous increase of personnel, while the number of hours
worked increases more rapidly. Similarly, production and sales values increase
more rapid than the payments to personnel. Table 6.1 presents the number of
official firms registered at SIEM. All established firms subject to taxation have to
register in the SIEM. This latter is the reason that artisanal cheese makers are
not included. During the fact-finding mission, stakeholders mentioned over
2,000 artisanal cheese makers: in the region of Chiapas alone around 600.
Table 6.1
Firms, personnel and production value of dairy processors
in 2008
Processors
Firms
Personnel Total
payment
Production
Capacity
value
used
number
persons
MXNm
MXNm
%
Milk and packaging
6
22,431
2,954
45,045
91
Cream, butter and cheese
43
11,784
1,320
25,308
73
Condensed, evaporated
10
2,546
584
20,144
78
310
36,822
4,858
90,496
81
32,417
2,716
48,529
71
and powder milk
All dairies 2008
All dairies 2000
Source: SIAP (2009); SIEM (2010).
Table 6.2 allows us to compare the cost structure of the different dairy industries. The industry with the highest variable costs is the liquid milk mainly
purchase of raw milk while the highest fixed costs (by the author indicated as
other fixed costs) are for the other 2 Mexican industry classes. These high other
fixed costs are unclear to us. The cost structure of the Mexican industry class
liquid milk resembles the performance structure of the dairy industry in European countries. The shares in Europe showed little variations for 1997 to 2007.
Table 6.2
Cost structure of dairy industries (%)
Indicator
Purchases of inputs
Liquid
Cream,
Condensed
milk
butter and
and powder (average 2003@2007)
cheese
milk
Mexico
Mexico
88
63
Dairy processors
Mexico Germany France
UK
64
88%
87%
83%
Labour
7
7
8
7%
9%
10%
Fixed costs + profits
5
30
28
4%
4%
7%
Source: Hernández Laos et al. (2000) and Eurostat.
The three larges milk processors in the country are Lala, Nestlé and Sigma.
These three firms together process 68% of total milk. Other major dairy firms in
Mexico are Alpura and Chilcota. Lala and Alpura are dairy cooperatives, while
Sigma, Nestlé and Chilchota are private firms. Table 6.3 shows the processing
65
share of each of these firms in Mexico. Besides these main processing firms,
other smaller firms supply more regionally than nationally. Among these, there
are two well-known international firms: Danone and Kraft foods (Dobson and
Jesse, 2009). Table 6.3 does not include the extra 3.6bn litres that are processed by small operators into artisan products or consumed on farms.
Table 6.3
Firm
Major processing companies and Liconsa in Mexico
Quantity processed annually (billion litres)
Processing share (%)
1.75-1.95
30
Nestlé
0.8-1.3
20
Sigma
0.35-0.65
18
Alpura
0.78-0.80
12
Chilchota
0.30-0.65
10
Liconsa
0.42
6
Other
0.23
4
Total
10.1
100
Lala
Source: Dobson and Jesse (2009).
Structural quality monitoring of bulk tank milk depends on the policy of the
processor. Almost all processors have their own laboratories in which they can
do their own analysis of milk samples, e.g. analysis of incoming milk for antibiotic residues. The milk price they pay often depends on the quality of the raw
milk. The disadvantage is that this analysis is not independent and sometimes
farmers argue with the processors about the results. In these cases, Cofocalec
offers her services to farmers to do a second opinion (Cofocalec, 2010).
Additives to milk and the use of milk ingredients instead of raw milk are a hot
topic in Mexico, mainly practiced by medium processors. These processors,
who serve local markets and the periphery of big cities, do not comply with the
requirements of the large supermarket chains. The smaller processors use only
local raw milk without heat treatment, sold in unbranded bags.
66
Box 6.1
Liconsa
LICONSA is a parastatal company that produces and distributes milk to low-income citizens.
Milk is sold to consumers at MXN4 to 5 per litre, while its production cost is around MXN8
(4.50 purchase price plus MXN3.50 of production costs). Federal budget finances that gap.
LICONSA is trying to support national production by decreasing non-fat dry milk powders imports. Liconsa processed 1,000m litres milk in 2009: 630m litres from its domestic suppliers and the rest is imported milk powder. Liconsa does not provide services anymore that
formed part of the programme in the '80s. Liconsa purchases cooled and not chilled ('warm')
milk. In 2010, the budget is fixed for 1,200 litres of which 50% have to be from domestic
farmers. The price paid by LICONSA to producers gives a premium for quality milk, partly
paid by SAGARPA (San Juan et al., 2009). A governmental monitoring group sets the purchase price based on actual market prices. The purchase price is revised every three
months. The premiums can add up to MXN0.60 and are for:
-
Stimulus Fat content 30-32 grams/32-34 grams/>35 grams
0.05/0.10/0.15
-
Protein content >30 grams
0.05
-
Low total plate count
0.05
-
Low somatic cell count
0.05-0.15
-
Negative sampling of antibiotics
- Permanence in Liconsa Register >1 year
0.05
0.15
67
7
Wholesalers, retail and consumption of
dairy products
Key Findings
-
-
Supermarkets and convenience stores are the main outlet for processed
fresh milk, the daily/week market for raw milk.
Traditional products have the largest volumes in sales, but low or even negative growth rates. Flavoured milk and yoghurts have growth rates between
2 to 3% annually.
Milk and milk products take almost 3% of the consumer budget (10% of the
food expenditures).
The dairy consumption of 300ml per day per capita is too low compared to
the FAO recommendations of 600ml per day per capita.
The Mexican milk consumption will increase with a growing population and
income.
Little information could be retrieved on the structure and performance and
on the distribution of dairy products. Table 7.1 provides the number of wholesale and retail officially registered by SIEM. The low numbers in wholesaling indicates that large numbers of non-registered entities are active on the Mexican
market.
Table 7.1
Number wholesalers and retailers officially registered in SIEM
Description
Wholesale of natural milk
Wholesale delicatessen products and creamery
Firms
340
56
Retail of milk
1,443
Retail trade of food in supermarkets and convenience stores
8,438
Retail trade of food in non-specialised stores
1,584
Source: SIEM (2010).
68
Since 2003, the market with the USA is fully open, but according to the
president of Canilec (2010); final products from the USA have not yet entered
the Mexican retail. The processors experienced a high loyalty to their brands
and managed to realise an annual market growth of 4% the last 6 years. Mexican processors are now exporting and investing in other countries: Lala in the
USA, Esmeralda in Uruguay (2 factories) and Argentina (1 factory) and exporting
condensed milk to North and South America (45,000 tonnes per year).
A case study in the State of Mexico showed that the producer gets 53% of
the consumer dollar and the rest of the chain receives 47% (Nava et al., 2005).
Self-service is the leading practice for Mexican consumers to acquire fresh milk.
Figure 7.1 shows the main channels of fresh milk and raw milk.
Figure 7.1
Market channels for fresh and raw milk
100
Other
Market
Convenience store
Supermarket
80
60
40
20
0
Fresh
Raw
Source: Proleche (2007).
Figure 7.2 shows that the main retail formats for dairy products are super-/
hypermarkets and discounters. Both formats, market share in 1998 62% and in
2010 72%, got a larger share at the expense of the independent small grocers
and non-grocery retailers. Their markets shares declined from 26% viz 10% in
1998 to 20% viz 2% in 2010. The market share of convenience stores, doubles
in that period from 2% in 1998 to 4% in 2003 and remained on that level in the
following years.
As in many other countries, the sales of 'traditional' drinking milk and cheese
products are stable or even declining. In volumes, these products are the largest. Milk categories are for almost 60% consumed by children. Products with
more convenience, like flavoured milk drinks and yoghurts shows an annual
growth of 2 to 3%, as is shown in Table 7.2. The highest growth rate showed
drinks based on soymilk, the volume is less than 2% of all dairy drinks.
69
Figure 7.2
Market channels for dairy products in % of total sales
100
90
80
70
60
50
40
30
20
10
0
1998
1999
2000
2001
Supermarkets/Hypermarkets
2002
2003
Discounters
2004
2005
2006
Convenience Stores
2007
2008
2009
Independent Small Grocers
2010
Others
Source: Based on Euromonitor international.
Table 7.2
Sales of dairy products in Mexico
Product
Metrics
2004 2005 2006 2007 2008 2009 Yearly
Fresh/pasteurised
million litres
3,397 3,375 3,282 3,303 3,094 3,033
-2.2%
million litres
1,562 1,548 1,501 1,675 1,666 1,579
0.2%
growth
milk
Long-life/UHT milk
Flavoured milk drinks million litres
125
137
148
160
155
144
2.9%
Soy drinks
million litres
14
28
39
73
71
71
38.2%
Powder milk
1,000 tonnes
69
69
75
81
80
77
2.1%
Drinking yoghurt
million litres
251
272
297
316
301
288
2.8%
Spoonable yoghurt
1,000 tonnes
205
224
239
251
248
239
3.1%
Processed cheese
1,000 tonnes
23
26
27
28
27
25
1.2%
Soft cheese
1,000 tonnes
271
301
307
315
299
266
-0.3%
Hard cheese
1,000 tonnes
107
116
122
125
120
108
0.2%
Source: Euromonitor International: Country Sector Briefing on Drinking Milk Products, Yoghurt and Cheese Mexico,
December 2009.
70
The composition of total households' expenditure in Mexico is shown in Table 7.3. It shows that 29% is spent on food, beverages, and tobacco. Expenditures on milk and milk products count for 2.8% and are among the smallest
category. Liquid milk represents 64% of dairy consumption, from which 52% is
spent in pasteurised liquid milk. Liquid milk is preferred because it is perceived
as cheaper, healthier and stronger, while consumption of processed dairy products has been affected by the financial crisis (San Juan et al., 2009).
Table 7.3
Households basket composition as percentage of total expen@
ditures
Total (%) Food (%) % of milk
(products)
Food, beverage, tobacco
29
29
Tobacco, alcoholic and other beverages
3.0
Outside house consumption
6.9
Fruits and vegetables
3.1
Milk and milk products
2.8
Pasteurised liquid milk and UTH
100
52
Powder, condensed or evaporated milk
7
Other milk: such as raw, donkey, goat milk
5
Cheese
24
Yogurt
7
Cream
3
Other dairy products
2
Meat and egg
6.2
Fats and vegetable protein
Clothing and dwelling
Cleaning and domestic expenditures
Health and personal care
7.4
15
6
9
Transport
19
Education and leisure
16
Other
6
Source: CANILEC (2008).
Table 7.4 present the consumption of dairy products for the selected countries. It shows that the Mexican consumption is modest, but more or less on the
same level as other countries with a comparable income. Consumption of dairy
products rises with a rising GDP per head. The expected rise in GDP per head
and population growth (Section 2) will result in a growth in the total consumption
of dairy products. The population growth alone accounts for 1.3% annual
71
growth. The consumption of dairy products per capita in the period 2000-2005
was stable according to FAO consumption data.
Table 7.4
Dairy supply quantity (kg/capita/yr) and GDP/capita
(current USD) in 2005
Country
Butter
Cheese
Cream
Milk
GDP
USA
2.1
15.4
0.02
256.5
41,873
Brazil
0.4
0.2
120.8
4,741
New Zealand
6.5
3.1
0.19
165.2
26,223
Netherlands
2.1
20.0
0.36
339.9
38,785
Argentina
1.4
8.0
0.08
186.1
4,728
0.06
117.1
8,216
232.8
33,088
Mexico
0.7
2.2
Australia
3.9
11.4
Belgium
6.3
16.5
10.05
244.5
35,838
Chile
0.9
3.5
0.09
104.3
7,257
Uruguay
1.4
3.4
149.8
5,252
Source: FAOstat.
Mexican population has been growing at a constant peace. It has also been
transforming since 1950 from rural to urban: 33.5% urban population in 1950
and 74.63% in 2000. Milk production has been growing at every time lower
peace. Hence, demand surpasses production. Moreover, demand is focused on
price and not on health contents and quality (Ávila Téllez, 2002). However, policies aim at reducing the calorie intake to prevent obesity among youth. Dairy
organisations have joined to protest that milk will be put on a list of food products prohibited to be sold inside schools. The dairy organisations state that
there is not enough information to justify that only non-fat milk is on the list of allowed products, while whole milk, yoghurts, et cetera are on the not-allowed list.
Per capita dairy consumption is too low, 300 ml per day per capita, while FAO
recommends 600 ml.
72
8
Supporting and enhancing environment
Key Findings
-
8.1
Farmers association represents farmers in different ways from enhancing
capabilities to political pressure.
Dairy processors are represented by their own organisation Canilec.
Different stakeholders comment that practical training and professional education is lacking. In addition, applied research is poor.
Sustainability is of growing concern for both government and private sector.
The Government is targeting the primary sector with specific programmes.
Nestlé focuses on sustainability of their suppliers mainly farms with dualpurpose cows.
Farmers and dairy processors associations
Associations are important as intermediaries between sector and the government, to develop a sector strategy and to support interests of the sector. In
Mexico, farmers associations have strong roots in the historical agrarian struggle for land rights. In the '80s and '90s with withdrawing government support,
farmer organisations started to focus on 'the control of productive processes',
that is, integration into market chains (Bartra et al., 2008). Nevertheless, farmers' movements maintain a highly political character. The most important national cattle associations in Mexico are:
1. ANGLAC (Asociación Nacional de Ganaderos Lecheros)
ANGLAC represents the large producers, those companies (about 200) with
over a thousand cows on one site with ample resources and technology.
They are mainly located in La Laguna and represent about 80% of national
milk production. Most ANGLAC members are also member of Canilec.
2. CNOG (Confederación Nacional de Organizaciones Ganaderas)
The CNOG is a lobbying organisation and - contrary to the UNPP - not attached to a specific political party. The CNOG integrates not only milk producers but also sheep farms, cattle raisers and beef genetic companies.
The CNOG is formed by regional Unions of farmers at state level in ten
states of Mexico, which differ in importance (Jalisco is important). Some
states have more than one Union, as they are also specialised according to
commodity (Cofocalec, 2010, Union, 2010). The Union is particularly con-
73
cerned about the small and medium producers, who are commercially most
affected by the internationalisation of dairy supply chains. According to the
secretary of the Unión Ganadera de Jalisco, all factors are against them:
they have to purchase feed at high cost but receive low price for their milk.
The Unión Ganadera de Jalisco operates supporting programmes for milk
producers financed by the state of Jalisco and federal resources from the
Secretary of Agriculture (Sagarpa). It focuses on production conditions to
improve milk quality and performance, on the collection of warm surplus milk
to regulate market price and on the construction of a milk powder plant
(see Box 2.1). CNOG integrates also beef cattle farmers.
3. UNPP (Unión nacional de Productores Pecuarios)
The UNPP is the livestock arm of the CNC (Confederación Nacional de Campesinos), which in turn is linked to the Partido Revolucionario Institutional
(PRI), ruling party in Mexico for over 70 years until the presidential elections
of 2000. It has a strong political component, visible by its many manifestations outside the Ministry of Agriculture to claim farmers' rights. The CNC
has the historical culture, perceptible to a more or lesser degree in all farmers' associations, of trading-off votes against benefits for the voters, as contrary to a more entrepreneurial focus.
4. FNDPCL (Frente Nacional para la Defensa de los Productores y
Consumidores de Leche)
The FNDPCL originates also from the CNOG. It is very outspoken in the media on dairy issues. In 2009, it posed a complaint before the WTO of dumping milk by integrants of NAFTA, claiming that North American producers
receive an equivalent of MXN5 per litre which is sold to Mexico at a price of
MXN2.30 for whole milk and MXN2.80 for skimmed milk (El Financiero,
2009). This statement does not comply with the protection rates as showed
in Section 2.2 An investigation to prove practices of 'dumping' subsidised
milk is expensive (requires hiring international lawyer consultants) and complicated (Cofocalec, 2010).
74
The CNOG, UNPP, and FNDPCL together represent about 150,000 nonintegrated small dairy farms, the majority with less than 50 cows. They represent about 20% of national milk production.
Dairy processors are organised in Canilec (Cámara Nacional de Industriales
de la Leche). Canilec represents 146 dairy processors, of which around
100 represent 77% of the total consumption of final dairy products in Mexico.
Among others, Lala, Alpura, Nestlé, Chichota, Danone, Alpura and Sigma are
members. Canilec secures the position of its members in the national end mar-
ket. To become member of Canilec, a processor must comply with the Codex
Alimentarius and the USA Food and Drug Administration (FDA) regulations.
CANILEC promotes sustainability diminishing methane gas emission, wastewater
treatment plants, conversion of energy use from gasoline to gas; treatment of
animal waste.
8.2
Knowledge infrastructure: research and extension
INIFAP (Instituto Nacional de Investigaciones Forestales, Agrícolas y Pecuarias)
is a governmental network of research institutes that has as mandate ' … to
generate scientific and technological innovations in agriculture and forestry, as
a response to demands and needs in the agro-industrial chains and in the several types of producers in order to contribute to sustainable development …'.
INIFAP counts 1,052 researchers in 38 regional research centres and experimental stations. Of the researchers, 64% work on agricultural issues, 25% on
livestock issues, and 11% on forest issues (INIFAP, 2009). INIFAP has a special
network for beef cattle including governmental institutions, service providers,
and private sector enterprises covering the whole chain. INIFAP works closely
together with Sagarpa on the implementation of e.g. PROGAN. INIFAP works
with different modules for the transference of knowledge and technologies to
farmers and service providers, such as the GGAVAT groups, field schools, and
through diplomats and workshops for the private sector on the issues of artificial insemination, vaccines, software, et cetera.
Sagarpa and INIFAP finance and promote 'Ggavatt-groups' (Cattle ranchers'
technology validation and transfer groups). GGAVATT groups consist of 10 to
20 cattle farmers with the same production site characteristics, who have to be
organised in order to receive extension service aiming at improving production
systems. Since the '80s, triangles between researchers, service providers/
change agents and farmers are promoted.
Leading universities (Tecnológico de Monterrey, Universidad de Chapingo,
UAM, UNAM) have their departments for livestock research.
Agricultural extension services form a large part of the many support programmes implemented by Sagarpa. Sagarpa staff does these extension services, but also third parties may inscribe.
Stakeholders from the dairy sector comment that applied research is lacking. They also think that farmers have a lack of knowledge, with the exception of
the large farms. Farmers do not really evaluate the strategy of breeding, feeding, and grazing. They do not implement specific improvement or investments:
75
they only focus at milk production and number of calves that are born. They can
make an improvement in management if a good source of knowledge and training exists. What is needed according to Reproducción Animal are practical training centres, where farmers learn how to manage a dairy herd, feed production
and feeding. The very big farms in LaLaguna solve this by hiring external advisors like veterinarians and nutritionists from the USA. However, for the medium
sized farmers, who want to improve their performance and to specialise practical knowledge and training/education is needed (Reproducción Animal, 2010).
Box 8.1
Nestlé
Nestlé buys milk from 4,500 producers, 2.3m litres per day. Nestlé's relationship with the
producers is strictly to buy the milk. Nestlé is not a cooperative. They have informal contracts
with the farmers, which mean 'informal (oral) understanding'. Farmers can decide to deliver
their milk to another buyer, but they must inform their decision in advance to Nestlé.
Much variation between the producers selling the milk to Nestlé exists:
-
a few very big farms: 20 farmers with >20,000kg per day;
30 farmers with approximately 5,000kg per day;
the other farms deliver on average 500kg per day (between 10 and 5,000kg per day).
Trucks are collecting all milk. Nestlé only buys cooled milk. There are no collection cen-
tres owned by Nestlé. About 90% of the farmers have a milking machine and cooling tank.
Some small farms share a cooling tank (e.g. family members). Nestlé provides technical assistance and also financial resources if necessary. Small farms (<1,000kg per day) can get
loans from Nestlé to use for investments, but only if Nestlé sees future perspective and if the
farm can produce their own feed. If farms are near the city or without land, Nestlé does not
provide loans.
Nestlé has a policy to develop. They have several reasons for this:
-
Nestlé prefers 1,000 farms of 1,000kg per day instead of 100 farms of 10,000kg per
day. They think it is better for food safety and environment. Nestlé is concerned about
the environment, as no legislation exists.
-
If you have many small farms, more persons benefit profit and more employees in total,
so you keep people at work. Many small farms that produce the same amount of milk
than a big one.
-
The interdependence is bigger when farms are large. Buying milk from many small farms
gives more flexibility for Nestlé and allows the application of their principle of business:
Creating Share Value.
76
Box 8.1
Nestlé (continued)
Quality and Pricing
Nestlé takes milk samples from every delivery from every farmer. Milk samples are analyzed
ad random three times in two weeks (farmers do not know when). Nestlé pays a basic price
with premiums (e.g. if a farm is free from Tuberculosis and Brucellosis, have a good TPC and
Solids content) and penalties (for antibiotic residues). Price also depends on cost price of
production, region, market, and competition, so not all farmers in the country receive the
same price from Nestlé. Total Plate Count (number of bacteria in the milk) is also analyzed,
but Somatic Cell Count not everywhere.
Nestlé does not promote the use of BST, but does not forbid it either, it is the farmer's
decision in consideration that in the Mexican Law it is allowed.
In the future Nestlé wants to buy more milk from tropical areas, because they have a big
potential and good use of natural resources of production. Nestlé says they need efficient
farmers in order to survive.
8.3
Sustainability
Farmers and processors do not yet recognise environment and sustainability as
important. Stakeholders tell that in the near future, more attention should be
paid to the water shortage in the North, CH4 emission, bio-fuel production (e.g.
from manure) and deforestation in the South (Canilec, 2010). According to several newspaper sources, in Mexico, every year around 260,000 hectares of
forest disappears and the principal hydrological water basins are contaminated
with salt and arsenic. In comparison with the period of 1990-1994, 1.9m of
hectares of the productive potential of land deteriorated and 67.7% presents
some kind of degradation (chemical, hydrological, physical). Aquifers are overexploited or contaminated with salts. In the region of La Laguna, the hydrological balance is negative: the quantity of water extracted, exceeds the natural recharge of the aquifers. In the region of La Laguna agriculture uses 80% of water
resources, cities and-household 15%, and the industry 5%. The government
support financially 'green' programmes, but technology and knowledge is lacking in Mexico.
77
9
SWOT analysis
Key Findings
-
9.1
78
Opportunities of the dairy industry in Mexico frame the opportunities for
Dutch enterprises and organisations.
Farmers' capabilities of management on cattle, feed and roughage production and milking infrastructure in Mexico need to be strengthened.
Seasonality in raw milk supply results in low prices during spring.
Key Success Factors, actions and opportunities are addressed to each
chain actor in Table 9.1.
A focussed agenda setting strategy, shared by all chain actors and environment, will enhance the Mexican dairy industry.
Introduction
This chapter analyses the Strengths, Weaknesses, Opportunities, and Threats
(SWOT) of the Mexican dairy sector. The Opportunities and developments (Section 9.2) on the Mexican market frame the opportunities for the Dutch suppliers.
The Key Success Factors and the business opportunities are presented in Section 9.3 and addresses specific chain actors. The Dutch business opportunities
will be addressed in Section 9.4.
A SWOT analysis recognises two viewpoints:
1. External analysis
The threats and opportunities are the main items for analysing the external
environment and are out of control for the industry. These threats and opportunities are derived from the macro-environment and the industry environment. The elements are political, legal, economic, technological, and
social forces that affect the industry. An example is given to clarify the impact of the industry focus. Let us assume that the Mexican goal is to achieve
a higher level of employment in the dairy sector and thus increasing the
milk production and decreasing the imports. This is clearly an opportunity
for the Mexican dairy farmers and breeders. It is, however, a threat for
Dutch exporters of dairy products to Mexico. It might be opportunity for the
Dutch to support the Mexican aim by providing consultancy knowledge or
high-valued semen.
2. Internal analysis
The industry's strengths and weaknesses, the internal environment, have
to be categorised. These issues are under control of the industry. On these
issues the performance of the industry is compared with others or selfimposed standards based on the own experiences in the past. Competitive
advantage refers to resources that cannot fully be duplicated by other countries. The main resources in this respect are human, organisational, and
physical resources. A competitive advantage in Mexican dairy might be raw
milk with a cost price below import prices. Abundant availability of labour of
land or high yields, as such, is not a competitive advantage. They are an advantage if it results in a lower price or a better quality for the same price
compared to the competitors.
We discuss in the following sections the dairy industry. Veal production is
not considered as an opportunity in Mexico: consumers do not know veal and
demand is uncertain. Production is economic not desirable due to shortage of
water and feed, according to stakeholders. Market introduction of veal will be
costly and will demand many efforts. This will be already a hard job for a domestic enterprise, who knows the Mexican culture and market.
9.2
SWOT: Strengths, Weaknesses, Opportunities and Threats
Strengths
- Knowledge and farm management on large and modern farms
Large-scale and modern farms are located in Mexico, with up-to-date technology and management. They have milk control, confidence in genetics and
equipment to handle proficiently the cattle and milk. They hire international
experts and their performance is on a comparable level as farms in the USA.
-
Dairy processing knowledge
Foreign dairy processors as well as Mexican processors with foreign subsidiaries are active on the Mexican market. These firms provide economies
of scope: technology and product knowledge from different countries can be
exploited on the Mexican market.
-
Farmers and processors associations
Farmers associations and the processors association support enhancing the
performance of the members and implementing technologies that are more
advanced. However, it became not clear whether they developed a business
strategy shared by suppliers, farmers, processors, supporting and enhanc-
79
ing industries as well public authority. Some associations are policy oriented
(pressure group).
-
Knowledge transfer
Nestlé, one of the largest multi-national dairy processors, supports small
and medium-sized farms in improving their management. This social responsibility enhances the competencies and capabilities of a large number of
farmers. Lecheria Guadalajara has a similar strategy on a smaller scale. The
Union (CNOG) provides farmers technical assistance to improve milk quality
and production.
-
Sector growth and decreasing support levels
The milk production grew annually by 1.9%, while at the same time subsidies
and protection rates decreased. The dairy sector showed to be competitive.
This competitiveness is not strong: the Mexican import grew faster than the
monetary world imports.
Weaknesses
- Weak infrastructure and poor management on farms
Many farmers have no cooling tank or access to a cooling tank, which is a
prerequisite for an acceptable level of milk quality. Other technologies seem
also inadequate. Milk quality control, disease control, feed management, and
breeding are at a poor level. The result is a poor economic performance.
-
Seasonality in milk supply
In spring and summer, a season with sufficient roughage, a peak in raw milk
supply exists. This seems to originate from the farms with dual-purpose cattle. Dairy consumption remains on an equal level during the year. This results in price variations.
-
Not self-sufficient
Mexico is a net importer of diary products and in no period, the production
is sufficient to match the domestic consumption. Processors will be reluctant to invest in milk powder plants, as these plants will be a major part of
the year idle and imported milk powder is cheap.
-
Poor knowledge of farmers on own performance
Lacking information systems on milk production per cow and on economic
indicators prevent farmers improving their management on all subjects:
breeding, feed management, profitability.
-
80
Credit facilities
The primary sector is hampered by credit facilities and credit is rather
costly. The image of the agricultural sector is poor. Moreover, farmers consider credits from the government as subsidies, which do not increase their
credibility. Business plans, based on sound economics, are needed to convince credit providers, that the loan including a fair interest can and will be
paid back.
-
Breeding
Veterinary reasons might prevent import of semen of some countries, but in
general, sufficient semen can be imported. Improvement of the genetic quality of dairy cattle is hampered by the low use of Artificial insemination (AI). AI
requires a minimum farm size and a good infrastructure of AI services.
-
Animal health
Frequent diseases reduce production levels or cattle's lifetime (tuberculosis,
brucellosis, anaplasmosis, babesiosis, fertility problems, mastitis, ecto- and
endoparasites, hoof problems). Mexico is Foot and Mouth disease free.
-
Milk production control systems
Milk production control systems at the cow level are needed. Such a system
is in the Netherlands widely accepted and seen as a useful tool to monitor all
kind of management aspects like feeding and breeding.
-
Low effectiveness of government programmes
In general the government programmes have sound objectives. However,
the implementation needs strong improvement in effectiveness and efficiency. Farmers' attitude should change. Subsidies should be used for the
goals for which they are granted. Loans should be paid back with interest
and should not be seen as subsidies.
-
Knowledge Infrastructure
Practical training and professional education is lacking, for farmers as well
as for service providers. Applied research is seen as poor.
-
Feed production and preserving
Feed production and preserving for periods outside the growing season
have a poor level of proficiency. Roughage production can be improved be
better grassland seeds and grassland management.
-
Feeding
Better techniques for feeding are needed: outside the parlour and adjusted
to the stage of lactation.
-
Weak competitiveness
Despite lower farm gate prices in Mexico than in the USA, Mexico has to import dairy products. Milk powder is a cheap substitute for domestic produced raw milk. It suggests a poor performance of producer or/and at
processor.
81
-
Food law not strict
The processing industry only cares about the lowest price for their ingredients wherever it comes from. Sometimes they use vegetable ingredients to
make milk or cheese. Quality awareness among chain participants and consumers is low.
-
Food safety artisanal products unclear
Artisanal producers are unclear in food safety aspects and pay a low price
to producers. As the market develops to a higher end market, these products are not competitive.
-
Quality control
Supply chain wide quality control of milk and dairy products is poorly practised. Third party inspection and certification of dairy products is scarce but
emerging.
-
Sustainability.
Sustainability is not yet an issue for farmers and processors, despite the
money from the government for 'green' programmes. Environment has to be
an issue, but Mexico lacks knowledge and technology to prevent environmental damage to the environment.
Opportunities
- Population and income growth.
Population is growing, which will result as such in a larger market. The
growth of the GDP per head will lead to a higher consumption of dairy products per head. Even with these shift the actual consumption has to be doubled to reach the FAO recommendations.
-
NAFTA membership
Opening of the economy allows producers and processors to import technology from other countries, without (prohibitive) import duties. This enables
to modernise the industry by buying better technology that included embedded knowledge.
-
82
High value products
With rising income, the demand for differentiated consumer products (flavoured milk and yoghurts) will increase. The growth rate of these products is
higher than the 'traditional' dairy products. The urbanisation will also contribute to a higher demand of these products. The international operating dairy
suppliers can exploit economies of scope: they have recipes of deserts,
convenience, or health products. These recipes have to be adapted to the
Mexican consumer preferences.
Threats
- Cheap import
An overall concern of farmers is the cheap import especially of milk powder.
With the abolishment of subsidies and protection imposed by WTO or
NAFTA, trade will have an increasing impact on the economic activities in
Mexico. If Mexico succeeds in putting their economic performance on a
competitive level with other countries, the country will benefit of the openness.
-
Government support
In general the government programmes have sound objective of increasing
productivity and infrastructure of small farmers. However, the implementation needs strong improvement in effectiveness and efficiency; aiming at
making farmers' attitude market driven. Farmers are eligible for support if
they are organised and from marginal areas, more than on the analysis of
sound business plans. Politics is sometimes used to win votes instead of
long-term support of the agricultural sector.
9.3
Key Success Factors and business opportunities
In general, one can state that the weaknesses have to be mitigated and threats
have to be dealt with. A developed critical domestic market enhances performance of the domestic industry according to Porter (1990). Table 9.1 provides
the Key Success Factors, possible actions and the business opportunities.
The actions are addressed to specific chain actors.
83
Table 9.1 Opportunities for enhancing the Mexican dairy industry
Actor
Key Success
Action
Opportunity
Factor
Supplier of
Increase awareness of
Higher milk returns,
semen and
Genetic potential
benefits. Enhance
higher competitiveness
embryos
knowledge transfer,
extension, and
accessibility of Artificial
Insemination. Include
more issues in breeding
strategy
Credit
Providing credit on
Evaluate the dairy sector
Lower risk on lending,
facilitators
sound economic
on their business
improvement of dairy
business plan
characteristics and
farms and firms
performance
Feed producers
Providing year
Optimising technology and Higher level of
around well priced
inputs (including by-
business activities,
concentrates
products from the food
higher performance
industry)
Suppliers of
Tailored made
Support farmer in
Increasing own
equipment for
supply
implementing beneficially
business activities
farms and
e.g. cooling tanks, milking
processors
machinery
Dairy farmers
Overall
Improving their knowledge Better performance.
competencies and
and competencies by
Producing at
more specific
training
competitive prices
proficiency in
possibility of levelling
roughage
seasonal production
production, feeding
strategy and rearing
young stock
Artisanal
Consumer trust and
Develop a strategy for
Consumers trust in
producers
quality
improving and embedding
differentiated products,
quality and food safety of
better prices
artisanal products
84
Table 9.1 Opportunities for enhancing the Mexican dairy industry (continued)
Actor
Key Success
Action
Opportunity
Factor
Large
Develop consumer
Serving the market with
Long term preferred
Processors
market
quality products at low
business partner for
prices and enlarge market farmers as well as
with differentiated
supermarkets
products
Professional
Capabilities and
Enhance capabilities by
Higher proficiency
organisations
knowledge of actors
organising training and
levels for all actors in
(service providers
extension
the chain resulting in
included) in supply
better performance
chain
Professional
Strategy for dairy
If not available: establish
Focus on improving
organisations of
industry
one. Task: developing an
Key-Success Factors
farmers and
agenda setting strategy.
processors
Lobbying to get funds to
realise strategy
Public
Industry enhancing
General public issues like: Lower transactions
authorities
institutions
Adequate infrastructure,
costs and higher
education aimed at dairy
performance of the
or doing business issues
industry. Income and
(e.g. solve problems of
employment generation
land ownership)
All
Shared strategy
Develop an agenda
Competitive,
setting strategy to focus
responsive, innovative,
the ambition on feasible
and viable dairy sector
and realistic issues
85
10 Recommendations and Dutch Business
opportunities
Key Findings
-
-
Most important challenges are enhancing the competencies of all actors, establishing an efficient value chain, reducing losses and chain transparency.
Enhancing a higher performance of the larger semi-specialised and dualpurpose farms is recommended
Levelling the seasonality of the milk supply will improve the Mexican selfsufficiency on dairy products.
Dutch enterprises can support the Mexican opportunities. Enhancing the capabilities of Mexican enterprises in the dairy is a major possibility for Dutch
organisations.
Dairy experience tours to the Netherlands enhance 'being in the top of the
Mexican stakeholders' minds'.
10.1 Recommendations
86
The most important challenges are enhancing the competencies of all actors,
establishing an efficient value chain, reducing losses and chain transparency.
Fostering entrepreneurship enhances realising opportunities. In Table 9.1
we provide several examples. To focus the recommendation we will be more
specific:
1. Higher performance of farms
Several levels of proficiency of farmers are identified. The large modern,
technology well-equipped farmers have enough sources and capabilities for
an excellent performance. We recommend a focus on the larger semispecialised and dual-purpose farms. A lower cost price per litre can be
achieved by a higher yield per cow. This requires a better management on
feed production, feeding, breeding and cattle care. Second, a higher quality
of raw milk needs furthermore a better infrastructure (milking machines,
cooling tanks, quality system). The challenges are enhancing farmers' capabilities, providing credit facilities based on sound economic and technical
business plans, providing institutions on milk production control at cow level
and on cattle breeding (e.g. Artificial Insemination). Credit and interests need
to be paid back from the higher farm income and that commitment needs to
be clarified in a sound economic business plan.
2. Levelling seasonality of milk production
Despite that, groups of farms can produce raw milk at a price competitive
with USA, the main foreign supplier; imports grow faster than the domestic
production. In the spring and summer period a peak in milk deliveries exists
and a dip in the other seasons. A higher self-sufficiency can be achieved be
a less pronounced seasonal supply. Feed strategies (including harvesting
and storing of roughage) and management competencies should be addressed to produce more raw milk in the autumn and winter period.
Achieving above recommendations demands a thoroughly elaborated strategy. All actors in the dairy industry from suppliers to wholesalers have to share
this strategy. The focus has to be on the activities under control of the chain actors. The performance of other countries will be a major benchmark for evaluating the performance of each actor in the supply chain. Actors need to be aware
that the conduct of actors in other countries is definitely out of their control.
10.2 Dutch Business opportunities
Abundant opportunities for the Mexican dairy industry are identified. Dutch firms
can exploit these opportunities by supporting the Mexican dairy industry achieving a higher performance. We distinguish opportunities for private firms and organisations that can enhance the institutional and knowledge environment.
We follow the supply chain downstream for the opportunities for private
firms:
1. Seed producers
Enhancing grassland and roughage production and management contribute
to lower production costs and availability of roughage year around. The latter is a condition for mitigating the seasonal milk production. Netherlands
is a renowned breeder of all types of seeds. Supplying improved seeds
for grassland as well as other roughage like silage maize is an opportunity.
Knowledge transfer how to exploit these seeds will strengthen business
relations.
2. Cattle breeders and Artificial Insemination
Semen and embryos from high productive dairy breeds can help the large
group of semi-specialised farmers. Dutch firms who want to export need to
enhance the infrastructure of Artificial Insemination. Awareness among farm-
87
ers of the benefits, confidence in genetics and good infrastructure to provide full service at any time are Key Success Factors to make artificial insemination and good genetics successful.
3. Feed management and production of concentrates
Concentrates are poorly available for most dairy farms: the large specialised
farms do produce it on their farm. Production and marketing of concentrates
need to be supported by a better feed management. Some Dutch companies started already a subsidiary in Mexico. Key Success Factor is providing
technological know how and how to organise knowledge transfer on feed
management.
4. Milk production control
Milk production control at the level of the individual animal is an useful tool to
monitor all kind of management aspects like feeding and breeding. In addition, these data can be used to estimate breeding values of bulls. The actual
participation in milk production control in Mexico is low because farmers are
not interested in sharing data. Enhancing the supporting industry is again an
important issue.
5. Joint ventures and subsidiaries
Processing industry can establish joint ventures or subsidiaries in Mexico
and exploit economies of scope. Opportunities can be found in differentiated
high value consumer products and technical application based on raw milk.
6. Export of products
The Netherlands can export their products, mainly consumer products. The
low export performance, as expressed by the low import shares, shows that
support by the Dutch government might be beneficial, especially in the culture differences between both countries. Private firms are well capable to
draft feasible business plans.
Opportunities 1 to 4 are mutual dependent to a large extent and demand
support of knowledge transfer. The second strand of opportunities is in the field
of enhancing the institutional environment of the Mexican dairy industry. The
Dutch agricultural knowledge system is world wide renowned. Public-private organisations have ample experience in training from professional to academic
level. More specific: Dutch organisations provide training for farmers world
wide, with a mix of training at location and at facilities in the Netherlands. Organising responsive viable value chains, including logistics received last decades
much attention at the Dutch universities and colleges.
88
Finally, companies and organisations who want to export to Mexico should
tailor their product's marketing to suit the different farm styles and Mexican culture of doing business. Inviting Mexican stakeholders to experience the Dutch
way of dairy farming and processing will enhance the market opportunities of
the Dutch on the Mexican market. Such tours can be organised in close collaboration with Mexican professional organisations (e.g. Canilec). Appendix 10 provides a list of companies in Mexico related to the dairy industry.
89
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Appendix 1
List of interviewed persons during fact finding mission
Thursday July 8, 2010
Dra. Ma. del Carmen del Valle Rivera
UNAM, Instituto de
Mexico D.F.
Investigadora Titular
Investigaciones Económicas
Dr. Remigio Espinoza G.
Reproducción Animal
Mexico D.F.
Rabobank
Mexico D.F.
Ing. Bernard E. Herrera González
FOCIR ( Fondo de
Mexico D.F.
Gerente de Gobierno Corporativo
Capitalización e Inversión del
José Luis G. Arellano Alvite
Sector Rural)
Director
M.V.Z. Humberto Sánchez Ortiz
Friday July 9, 2010
Kenneth Shwedel
Director Ejecutivo. Análsis y
Asesoría en Agronegocios
Director de Análisis y Operación
de Programas
F. Javier Delgado Mendoza
Director general
MVZ Consuelo Dueñas Sansón
SENASICA - SAGARPA
Mexico D.F.
Nestlé México, S.A. de C.V.
Mexico D.F.
PROLEA
Acatic, Jalisco
Posta El Cuatro
Tepatitlán, Jalisco
La Daga
Lagos de Moreno,
Rancho El Tigre,
Lagos de Moreno,
Ganado de Registro
Jalisco
Subdirección de Exportaciones/
DGSA/SENASICA/SAGARPA
Hector Enrigue Loera
Gerente Unidad Agropecuario
Saturday 10, 2010
Ing. Ramiro Ramirez Gonzalez
Pte. Del Consejo de Administración
Mr. Eduardo Ramírez-Peña
Dueño
Sunday 11, 2010
Martín Gerardo-Gallardo
Dueño
I.I.S. César Damián Gallardo Jiménez
Jalisco
95
Juan Pablo Anaya-Zermeño
Lácteos Deshidratados
Lagos de Moreno,
CEO
Mexicanos (LdeM)
Jalisco
Rosa María Casillas-Buenrostro,
Cofocalec
Lagos de Moreno,
Lic. Rodrigo Anaya Zermeño
Centro de Valor Agregado
Lagos de Moreno,
Director
(CVA)
Jalisco
Q.F.B. Álvaro Cerón Martínez
Lechera de Guadalajara
Guadalajara
Jefe de control de calidad
S.A. de C.V.
Jalisco
Lab Director
Monday 12, 2010
Ing. Hector Morales Reyes
Jefe de Aseguramiento de Calidad
Mario Valencia Zarazúa
Unión Ganadera Regional
Tlaquepaque,
Director Técnico
de Jalisco (CNOG)
Jalisco
Cofocalec
Guadalajara
Cofocalec
Guadalajara
Dr. Félix Martínez Cabrera
CANILEC (Cámara Nacional de
Mexico D.F.
Presidente
Industriales de la Leche
MVZ. José Manuel Villela Dadda
Liconsa
MVZ Otilio Valdes Correa
Secretario
Blanca Rosa Reyes
Tuesday 13, 2010
Dr. Sergio Soltero Gardea
Director General
MVZ Antonio Contreras Jiménez
Subdirector de desarrollo
Wednesday 14, 2010
Coordinador General, Subdirección
de Maquila y Compra de Leche
Nacional
96
Mexico D.F.
Appendix 2
Administrative regions, capital, population and area
97
Name of Subdivision
Capital
Population
Area in km²
Aguascalientes
1,032,680
5,500.8
2 Baja California
Mexicali
1,806,829
73,051.1
3 Baja California Sur
La Paz
475,586
72,710.5
4 Campeche
Campeche
743,869
50,329.3
5 Chihuahua
Chihuahua
3,316,178
248,115.3
6 Chiapas
Tuxtla Gutiérrez
4,250,246
73,717.9
7 Coahuila
Saltillo
2,415,862
150,745.5
8 Colima
Colima
597,970
5,714.3
9 Distrito Federal
Mexico
8,657,050
1,353.6
1 Aguascalientes
10 Durango
Durango
1,460,178
120,706.3
11 Guerrero
Chilpancingo
3,237,579
64,707.5
12 Guanajuato
Guanajuato
4,908,056
30,516.8
13 Hidalgo
Pachuca
2,356,133
21,327.1
14 Jalisco
Guadalajara
6,653,364
79,856.5
15 Mexico
Toluca de Lerdo
10,662,420
21,667.9
16 Michoacan
Morelia
4,090,997
59,648.5
17 Morelos
Cuernavaca
1,680,239
5,039.1
18 Nayarit
Tepic
941,442
27,391.9
19 Nuevo Leon
Monterrey
4,123,418
65,230.0
20 Oaxaca
Oaxaca
3,625,487
92,845.7
21 Puebla
Puebla
5,522,918
34,356.9
22 Queretaro
Queretaro
1,568,610
12,047.4
23 Quintana Roo
Chetumal
1,090,281
51,321.1
24 Sinaloa
Culiacán
2,641,696
57,876.7
25 San Luis Potosi
San Luis Potosí
2,391,929
64,186.5
26 Sonora
Hermosillo
2,351,427
180,806.2
27 Tabasco
Villahermosa
2,041,286
24,345.7
28 Tamaulipas
Ciudad Victoria
2,976,339
79,409.6
29 Tlaxcala
Tlaxcala
1,044,369
3,976.0
30 Veracruz
Veracruz
7,058,898
71,393.9
31 Yucatan
Mérida
1,761,761
37,975.5
32 Zacatecas
Zacatecas
1,363,577
75,068.1
Source: http://www.geonames.org/MX/administrative-division-mexico.html
98
Appendix 3
Sagarpa programmes in 2010
Production system
MXNm
Beef and dual-purpose cattle
5,302
Milk cattle
1,481
Sheep
474
Pork
922
Bees
276
Goats
217
Other
60
Poultry
770
Non production system specific
1,561
11,024
Support to
MXNm
Natural resources and productivity
4,433
Productive investments
2,559
Health and food safety
1,770
Support to organization
Support to organisation costs
Promotion
Risk administration
44
1,300
106
812
11,024
Source: Sagarpa (2010).
99
Appendix 4
Output and input based Producer Support Estimates (PSE)
MXNm
MXNm
MXNm
MXNm
MXNm
PSE
services
capital
Fixed
Variable
price
MXNm
Market
1,000
On@farm
on input use
inputs
Payments based
on outputs
on output
Support based
Payments
Total
support
Value
Production
(at farm gate)
Quantity
Year
MXNm
%
tonnes
100
1986
6,571
690
544
544
0
0
0
0
79
1987
6,393
1,451
1,075
1,075
0
0
0
0
74
1988
6,350
2,587
1,536
1,536
0
0
0
0
59
1989
5,750
3,458
817
817
0
0
0
0
24
1990
6,332
3,980
320
320
0
0
0
0
8
1991
6,925
5,555
1,797
1,797
0
0
0
0
32
1992
7,182
6,200
1,998
1,998
0
0
0
0
32
1993
7,634
6,875
2,912
2,912
0
0
0
0
42
1994
7,547
6,881
2,782
2,782
0
0
0
0
40
1995
7,628
8,804
-1,317
-1,317
0
0
0
0
-15
1996
7,822
14,111
852
739
0
0
0
112
6
1997
8,091
16,324
3,690
3,576
0
0
0
114
22
1998
8,573
19,237
7,166
7,056
0
0
0
109
37
1999
9,171
23,305
8,924
8,785
0
0
0
139
38
2000
9,600
25,327
9,334
9,209
0
0
0
125
37
2001
9,766
26,475
6,080
5,947
0
0
0
133
23
2002
9,958
26,246
11,135
10,963
0
0
0
172
42
2003
10,088
26,780
6,834
6,834
0
0
0
0
26
2004
10,170
28,153
2,066
2,066
0
0
0
0
7
2005
10,174
30,779
895
895
0
0
0
0
3
2006
10,401
33,595
3,651
3,651
0
0
0
0
11
2007
10,667
39,242
-6
-6
0
0
0
0
0
2008
10,918
48,712
200
0
200
0
0
0
0
2009
11,092
47,766
8,569
8,369
200
0
0
0
18
Source: Based on OECD Database 1986-2009 Producer and Consumer Support Estimates.
Appendix 5
National milk production, number of cows and yield
per cow
2000
2001
2002
2003
2004
2005
2006
2007
03@08
1999
annual growth
1998
475
483
490
497
511
518
527
543
559
571
578 2.2%
USA
71
74
76
75
77
77
78
80
82
84
86 2.2%
Brazil
19
20
20
21
22
23
24
25
26
27
28 3.9%
New Zealand
11
11
12
13
14
14
15
15
15
16
15 1.2%
Netherlands
11
11
11
11
11
11
11
11
11
11
11 0.4%
World
Mexico
2008
Milk production in million tonnes
8
9
9
9
10
10
10
10
10
10
11 1.9%
Argentina
10
11
10
10
9
8
8
10
10
11
11 5.1%
Australia
9
10
11
11
11
10
10
10
10
10
9 -2.2%
Belgium
0
0
4
4
3
3
3
3
3
3
3 -3.8%
Chile
2
2
2
2
2
2
2
2
2
2
3 3.7%
Uruguay
1
1
1
2
1
2
1
2
2
2
2 0.9%
Source: FAOstat.
101
World
USA
219.2 220.6 221.5 224.6 227.3 232.7 235.5 240.1 242.5 244.9 246.9
03@08
2008
annual growth
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
Million dairy cows
1.2%
9.2
9.2
9.2
9.1
9.1
9.1
9.0
9.0
9.1
9.1
9.2
0.3%
17.3
17.4
17.9
18.2
19.0
19.3
20.0
20.6
20.9
21.1
21.2
1.9%
3.5
3.4
3.3
3.6
3.7
3.9
4.1
4.1
4.1
4.2
4.3
2.1%
Netherlands
1.6
1.6
1.5
1.5
1.6
1.5
1.6
1.4
1.4
1.4
1.5 -1.1%
Mexico
1.8
1.9
2.1
2.1
2.2
2.2
2.2
2.1
2.1
2.1
2.2 -0.2%
Argentina
2.5
2.5
2.5
2.5
2.2
2.0
2.0
2.1
2.2
2.2
2.2
Australia
2.1
2.2
2.2
2.2
2.1
2.0
2.0
1.9
1.9
1.8
1.7 -3.4%
Belgium
0.0
0.0
0.6
0.6
0.6
0.6
0.5
0.5
0.5
0.5
0.5 -2.2%
Chile
1.5
1.5
1.5
1.5
1.4
1.5
1.6
1.6
1.7
1.7
1.7
3.5%
Uruguay
0.9
0.8
0.8
0.9
0.9
0.9
0.9
1.0
0.9
1.0
1.0
1.6%
Brazil
New
Zealand
1.9%
Source: FAOstat.
2001
2002
2003
2004
2005
2006
2007
456
452
452
445
449
447
442
434
429
03@08
2000
462
2008
annual growth
1999
World
1998
Yield kg milk/cow
427 -1.0%
USA
7,798 8,061 8,254 8,228 8,439 8,508 8,605 8,877 9,050 9,219 9,343
1.9%
Brazil
1,115 1,130 1,140 1,162 1,174 1,192 1,209 1,231 1,250 1,276 1,309
1.9%
New
3,282 3,241 3,666 3,689 3,701 3,653 3,663 3,553 3,667 3,748 3,500 -0.9%
Zealand
Netherlands 6,825 7,037 7,417 7,096 6,884 7,164 7,029 7,569 7,739 7,829 7,698 1.5%
Mexico
4,585 4,763 4,488 4,426 4,425 4,510 4,415 4,798 4,844 4,905 5,000
2.1%
Argentina
3,937 4,260 4,131 3,987 4,090 4,099 4,050 4,719 4,770 4,773 4,773
3.1%
Australia
4,582 4,723 4,996 4,847 5,309 5,038 4,944 5,215 5,366 5,336 5,337
1.2%
Belgium
102
0
0 5,990 5,909 5,760 6,078 5,639 5,781 5,592 5,758 5,610 -1.6%
Chile
1,359 1,399 1,372 1,495 1,499 1,469 1,452 1,451 1,450 1,420 1,478
Uruguay
1,707 1,761 1,755 1,713 1,684 1,714 1,660 1,704 1,723 1,659 1,659 -0.7%
Source: FAOstat.
0.1%
Appendix 6
Regional distribution of milk production and price per litre
Region
Production
Price
Production value
(1,000 litre)
(MXN per litre)
(1,000 MXN)
Aguascalientes
369,872
4.22
1,559,007
Baja California
193,422
4.72
912,506
46,636
7.34
342,481
Baja California Sur
Campeche
34,984
5.38
188,168
1,364,585
4.45
6,076,276
36,525
6.71
245,121
Chiapas
372,249
3.58
1,332,905
Chihuahua
901,830
4.59
4,138,681
Coahuila
Colima
Distrito federal
12,322
7.68
94,609
1,037,452
4.49
4,659,088
684,202
3.91
2,673,266
Guerrero
82,045
4.72
387,404
Hidalgo
452,977
4.39
1,987,368
Jalisco
1,861,333
4.15
7,714,352
Mexico
464,624
4.38
2,036,234
Michoacan
334,850
4.36
1,460,683
Morelos
18,809
4.72
88,841
Nayarit
62,019
3.68
228,180
Nuevo Leon
39,696
3.92
155,644
Oaxaca
145,213
5.87
851,993
Puebla
385,066
4.78
1,840,807
Queretaro
195,791
4.21
824,209
Durango
Guanajuato
Quintana Roo
5,601
3.68
20,603
San Luis Potosi
141,778
4.45
630,268
Sinaloa
108,075
4.15
448,833
Sonora
131,937
4.86
640,743
Source: SIAP, 2008
103
Region
Tabasco
Price
Production value
(MXN per litre)
(1,000 MXN)
110,694
3.4
375,810
30,209
3.92
118,457
Tlaxcala
110,924
4.43
491,765
Veracruz
683,203
3.74
2,551,558
5,608
5.08
28,487
164,950
4.07
670,832
10,589,481
4.32
45,775,180
Tamaulipas
Yucatan
Zacatecas
National
Source: SIAP, 2008
104
Production
(1,000 litre)
Appendix 7
Import of dairy products by Mexico
Import portfolio in USDm (average 2006@2008) and growth 2001@2003 to 2006@
2008 in %
Milk and
Milk and
Butter@
cream,
cream,
milk,
not conc.
conc.
Whey
Butter
Cheese
405
406
Total
yogurt
HS@code
401
USD
%
USD
%
USD
%
USD
%
USD
%
USD
%
USD
%
World
44.1
4
591.2
11
48.7
16
219.7
40
149.3
16
311.7
11
1364.8
14
USA
31.0
4
355.3
26
13.2
15
196.9
42
18.4
33
160.0
18
774.9
25
0.6
25
402
Brazil
New
403
404
0.6
0.5
18
153.8
10
0.1
-33
4.8
-13
10.5
79
89.0
17
25.0
0
283.5
10
0.1
3
0.8
-1
26.8
10
27.8
8
Zealand
Netherlands
Argentina
19.6
-4
0.1
-3
1.6
253
5.2
26
4.3
-19
31.8
-3
Australia
8.7
-3
0.3
-36
3.0
31
8.8
3
0.3
-48
21.0
-6
Belgium
1.7
18
0.0
-45
15.1
3
16.8
3
104
Chile
Uruguay
0.9
0.5
34
31.3
25
1.0
11.3
0
5.3
-3
29.0
0.1
0.9
0.3
4.5
38
51.6
43
85.4
35
32.0
15
82.4
19
Source: UN Comtrade.
105
Import in USDm and growth based on average 2001@2003 to average 2006@2008 in
%
Product Milk and
Milk and
Buttermilk, Whey
Butter, milk
Cheese
cream, not
cream, con@
yogurt
fats, dairy
and curd
concentrated
centrated
HS
spreads
401
402
403
404
405
406
1998
14.3
256.9
18.0
43.9
52.6
82.7
1999
12.3
233.3
16.6
36.6
65.2
98.7
2000
22.0
301.7
21.1
38.6
58.2
128.8
2001
27.4
441.0
25.6
45.9
66.1
181.9
2002
37.5
278.3
21.8
39.8
69.6
179.3
2003
46.6
325.6
20.9
38.0
81.1
189.7
2004
50.5
385.9
18.2
53.1
144.9
223.6
2005
47.1
506.7
26.3
101.6
181.6
256.8
2006
27.5
393.9
21.4
179.2
111.0
257.3
2007
63.0
683.5
57.8
327.4
157.7
344.7
2008
41.9
696.1
67.0
152.4
179.2
333.3
4%
11%
16%
40%
16%
11%
code
Growth
Source: UN Comtrade.
106
Appendix 8
Dairy trade of selected countries
Dairy trade in 2008 and annual growth 2003@2008
Country
Import
Export
USDm
growth %
USDm
growth %
56,329
15.3
64,601
14.9
1,680
7.2
2,994
38.1
212
13.6
509
60.0
75
29.7
6,563
19.0
3,189
10.2
6,908
10.0
20
9.6
812
24.6
1,470
17.5
91
14.2
Australia
538
24.2
2,208
10.8
Belgium
3,520
15.2
3,451
11.5
84
4.9
221
34.5
8
40.7
430
26.0
World
USA
Brazil
New Zealand
Netherlands
Argentina
Mexico
Chile
Uruguay
Source: UN Comtrade.
107
Appendix 9
1,000
persons
hrs
MXNm
pacity
stalled ca@
MXNm
Use of in@
MXNm
maquila b)
value
Production
ment
MXNm
Charged for
number
Total pay@
worked
Hours@men
involved
Personnel
Year
Sales value
Personnel and production value in the dairy milk industry a)
%
1998
29,222
72,291
1,876
34,707
33,734
32
1999
30,403
75,356
2,206
42,321
40,857
74
2000
32,417
80,717
2,716
48,529
47,912
65
71
2001
33,218
82,944
3,027
51,155
51,037
71
70
2002
33,733
84,018
3,405
54,851
53,811
78
65
2003
34,743
86,754
3,722
59,860
59,401
171
62
2004
35,413
90,134
3,934
69,461
67,759
56
62
2005
36,498
93,613
4,170
73,465
73,338
78
67
2006
37,010
95,397
4,410
78,818
79,390
143
78
2007
36,389
93,589
4,579
87,108
86,741
265
84
2008
36,822
94,817
4,858
90,496
89,924
111
81
a) In the table are taken into account: condensed, evaporated and powder milk, cream, butter and cheese.
Not included ice-cream, caramel and other dairy derivatives; b) Imported inputs processed in a factory in Mexico
for costs-tariff reasons and generally re-exported.
Source: SIAP (2009).
108
Appendix 10
List of companies related to the Mexican dairy sector
109
(352) 522-66-34
Telephone
www.alimesa.
Products/
Fresh milk
Dairy
Powdered milk
Fresh milk
Activities
No. 172
Tuxpan No. 15
DM LATTEE, S.A. DE C.V.
54500 Atizapán
Instituto Técnico Industrial 11340 México, D.F.
83299 Hermosillo, Son.
20909 Jesús María, Ags.
ALGIL, S.A. DE C.V.
Calle de la Plata No. 372
Panamericana
Km. 545 Carr.
DISTRIBUIDORA DE LACTEOS
S.A. DE C.V.
CREMERIA DEL YAQUI,
CREMERIA AGUASCALIENTES
Zuñiga Jalisco (
(55) 5397-5359
(55) 5089-2800
(662) 251-07-54
(449) 910-92-70
com.mx
www.esmeralda.
calientes.com.mx
www.cremeriaaguas
.com/
dustrial use
Fresh milk for in-
(distributor)
Fresh milk
Fresh milk
Fresh milk
www.corporativosmp Dairy
45645 Tlajomulco de
Carretera a Morelia
No. 3583
(33) 1201-2236
(229) 938-12-37
(353) 572-05-57
URL
CORPORATIVO SMP
91710 Veracruz, Ver.
59000 Sahuayo, Mich.
66149 Sta. Catarina, N.L. (81) 8336-1747
59360 La Piedad, Mich.
Place
com.mx
Fraternidad No. 411
Km. 6
Carr. Sahuayo La Barca
25 de Mayo No. 137
Calz. el Cuitzillo No. 509
Street
S.A. DE C.V.
COMERCIAL ALIMESA,
CAMPO ALEGRE ALIMENTOS
S.A. DE C.V.
ALIMENTOS J. GARCIA,
PIEDAD, S.A. DE C.V.
RURALES DE LECHE DE LA
ALIANZA DE PRODUCTORES
Dairy producers
Name
Note: For all telephone communications, please dial +52 before each number.
110
Pochtecas No. 61
LACTE DU MONDE,
(779) 796-01-17
(612) 121-11-85
(81) 8375-0561
(55) 5899-2000
(442) 211-40-44
Telephone
66499 San Nicolas de
los Garza, N.L.
Atún S/N
Alfonso Bernal Sahagún
No. 102
Callejón de Santo
Domingo No. 1000
S.A. DE C.V.
LACTEOS INDUSTRIALIZADOS,
S.A. DE C.V.
LAGRANGE, S.A. DE C.V.
Ags
20290 Aguascalientes,
Calz. Agustín G. López y
85427 Guaymas, Son.
09040 México, D.F.
89000 Tampico, Tamps.
(81) 8353-2200
(449) 971-02-35
(622) 222-03-70
(55) 5694-6887
(833) 214-07-83
33000 Cd. Delicias, Chih. (639) 472-50-51
LACTEOS DE GUAYMAS,
S.A. DE C.V.
No. 700
Díaz Mirón No. 921 Ote.
LA CREMA, S.A. DE C.V.
Av. Plutarco Elías Calles
INDUSTRIALIZADORA DE
LECHE DELICIAS, S.A.
Manz. 5 Lte. 5
S.A. DE C.V.
43800 Tizayuca, Hgo.
64550 Monterrey, N.L.
GRUPO REAL DE GANADEROS, Eje Oriente-Poniente
Av. Magnolia No. 1979
GRANJA PLANTA LA PERLA,
54730 Cuautitlán Izcalli,
23060 La Paz, B.C.S.
México-Querétaro
DE LECHE PURA, S.A. DE C.V.
Electricistas No. 590
Km. 37.4 Autopista
GANADEROS PRODUCTORES
GRUPO LA JOLLA
No. 40 Ote.
VICTORIA, S.A. DE C.V.
76040 Querétaro, Qro
Ote.
Av. Constituyentes
EMBOTELLADORA LA
Place
S.A.
Street
Name
111
com.mx
www.lagrange.
com
www.lactedumonde.
www.alpura.com.mx
www.alpura.com
URL
Products/
Fresh milk
Fresh milk
Fresh milk
Dairy products
Fresh milk
Dairy
Fresh milk
Fresh milk
Fresh milk
dairy products
Fresh milk,
Fresh milk
Activities
Carr. J. Gómez Portugal
Km. 1
LECHE LA ESCONDIDA
Dr. Mora No. 1230
ORGANISMO AGROINDUSTRIAL López Mateos No. 34
S.A. DE C.V.
GANADEROS DE CULIACAN,
NUEVA INDUSTRIA DE
No. 453
54713 Cuautitlán Izcalli,
80060 Culiacán, Sin.
11520 México, D.F.
(55) 5872-1643
(667) 760-60-47
(55) 5262-5000
(55) 5365-8994
Products/
Fresh milk
Dairy products,
Powdered milk
Fresh milk
Fresh milk
Fresh milk
Fresh milk
Fresh milk
Fresh milk
Fresh milk
Activities
ndustrial.com.mx
cheese, dairy
www.organismoagroi Fresh milk,
com.mx
www.santamonica.
www.nestle.com.mx
Av. Ejército Nacional
NESTLE MEXICO, S.A. DE C.V.
54714 Cuautitlán Izcalli
Av. Huehuetoca No. 3
MEGALAC, S.A. DE C.V.
(55) 5237-9100
www.liconsa.gob.mx
53390 Naucalpan,
www.sellorojo.
www.gilsa.com
www.laperla.com.mx
adora.com
www.agroindustrializ
com.mx
Av. Ricardo Torres N. 1
(33) 3657-9297
(442) 225-07-37
(662) 251-01-04
(449) 973-07-90
www.lala.com.mx
www.19hnos.
LICONSA, S.A. DE C.V.
44890 Guadalajara, Jal.
76900 Querétaro, Qro.
(55) 5729-3200
(391) 916-07-97
URL
com.mx
Río Alamo No. 2381 S.R.
No. 84
Josefa O. de Domínguez
No. 23
Hermosillo, Son.
47730 Totótlan, Jal.
Telephone
S.A. DE C.V.
LECHERA GUADALAJARA,
LECHE SAN MARCOS
Av. de los Cometas
Ags
Atotonilco
S.A. DE C.V.
LECHE LA PERLA
20900 Aguascalientes,
Km. 5 Carr. Tototlán-
LECHE DIECINUEVE HNOS.,
02300 México, D.F.
Av. Ceylán No. 1016
LALA MEXICO, S.A. DE C.V.
Place
Street
Name
112
No. 4201
PRODUCTORES DE LECHE,
Gustavo baz Prada
No. 3333
Eje Oriente Poniente
Mz. 5 Lt. 5
PROTEINA ANIMAL
S.A. DE C.V.
REAL DE TIZAYUCA,
S.A. DE C.V.
Km. 1 S/N
43800 Tizayuca, Hgo.
54030 Tlalnepantla
(779) 796-01-17
01-800-832-27-45
www.proan.com.mx
com
(442) 221-53-33
www.foque.com.mx
Carr. Querétaro-La Griega 76240 El Marquez, Qro.
PRODUCTOS ARACELI
(627) 522-50-00
www.tamariz.com.
DE PARRAL, S.A.
33820 Parral, Chih.
(222) 237-25-81
www.jersey.com.mx
www.lechezaragoza.
Carr. Esmeralda Km. 1
72410 Puebla, Pue.
(664) 687-17-01
PRODUCTORES DE LECHE
13 Sur No. 3108
PASTEURIZADORA MAULEC,
22000 Tijuana, B.C.
com.mx
www.pafrosa.
com
www.lechezaragoza.
URL
mx//maulec/
No. 6861
DEL NOROESTE, S.A.
(833) 213-23-90
(899) 923-3048
(614) 418-6451
Telephone
S.A. DE C.V.
Calle 1ra. Artículo 123
PASTEURIZADORA JERSEY
89120 Tampico, Tamps.
No. 302
PASTEURIZADORA HILL CREST Av. Ejército Mexicano
DE TAMPICO, S.A.
Tamps.
88631 Cd. Reynosa,
31030 Chihuahua, Chih.
Place
FRONTERIZA, S.A. DE C.V.
PASTEURIZADORA
Texcoco No. 415
Ricardo Flores Magón
PASTEURIZADORA DE LOS
S.A. DE C.V.
Street
Name
113
Products/
Fresh milk
Fresh milk
Fresh milk
Fresh milk
Fresh milk
yoghurt
cheese, cream,
Fresh milk,
Fresh milk
Fresh milk
Fresh milk
Activities
Av. Adolfo Ruiz Cortines
ULTRALACTEOS, S.A. DE C.V.
Km. 5.5
S.A. DE C.V.
LALA DERIVADOS LACTEOS,
Torreón 35090
Lázaro Cárdenas No. 185 Gómez Palacio 35070
GRUPO INDUSTRIAL LALA,
Adolfo Aymes No. 99
México - Querétaro
DE LECHE PURA, S.A. DE C.V.
S.A. DE C.V.
Kilometro 37.4 Autopista
GANADEROS PRODUCTORES
Cuatitlán Izcalli 54730
Av. 5 de Febrero No. 273 76130 Querétaro, Qro.
44940 Guadalajara, Jal.
32553 Cd. Juárez, Chih.
02300 México, D.F.
DE LECHE DE QUERETARO,
S.A. DE C.V.
Telephone
52 871 750 6529
52 871 729 3123
52 55 5899 2000
(442) 217-02-28
(33) 3812-0290
(656) 892-50-00
(55) 5333-1200
86100 Villahermosa, Tab. (993) 310-02-50
Place
UNION DE PRODUCTORES
DE JUAREZ, S.A.
UNION DE PASTEURIZADORES
S.A. DE C.V.
Calle 14 No. 2650
Ramón Rayón No. 1351
UNION DE GANADEROS
LECHEROS DE CD. JUAREZ,
Poniente 122 No. 459
UNIFOODS, S.A. DE C.V.
No. 2221
Street
Name
114
Products/
Fresh milk
cheese
yoghurt, butter,
Fresh milk,
Activities
www.lala.com.mx
www.alpura.com.mx
strial.com
dairy products
distribution of
Manufacturing and
dairy
distribution of
Manufacturing and
yoghurt
Fresh milk,
www.fuentesagroindu Fresh milk
com.mx
www.unifoods.
com.mx
www.ultralacteos.
URL
Av. Adolfo López Mateos
No. 81
Av. México 201
TECNICA MEXICANA DE
ALIMENTACION, S.A. DE C.V.
GERBER ALIMENTA,
No. 100 A
Ejército Nacional No. 453 11520 Mexico City
Paseo de Tamarindos
#150
Av. Palmas No. 215
DE QUIMICOS, S.A. DE C.V.
NESTLE MEXICO, S.A. DE C.V.
UNILEVER DE MEXICO,
S. DE R.L. DE C.V.
NUTRICAL, S.A. DE C.V.
products
(canned) dairy
Trading of
www.nestle.com.mx
com.mx
food products
household and
Production of
industry
the dairy and food
raw materials for
and exports of
Chapultepec
www.nutrical.com.mx Manufacturing,
com.mx
food products
and distribution of
Manufacturing
dairy preparations
food additives and
distribution of
trading, imports
52 55 5284 6120
Products/
Activities
www.proveinterquim. Manufacturing and
www.gerbercal.com
com.mx
www.cafemex.
URL
52 (55) 1105-4486 www.unilever.
52 55 5262 5000
52 55 5390 9099
52 55 5212 1691
52 55 5000 3400
Telephone
Desp. 401Lomas de
México 11000
Mexico City
Filiberto Gómez
54030 Mexico City
06100 Mexico City
54769 Mexico City
Place
PROVEEDOR INTERNACIONAL
S.A. DE C.V.
Street
Name
115
Av. Panamericana
Poniente No. 4
ESTABLO NACIONAL,
S.A. DE C.V.
San Juan del Río 76800
7766
+52 427 272
Concepción Km. 9
CUADRITOS BIOTEK,
S.A. DE C.V.
+52 461 618 300
Rancho San Jorge de la
GRUPO INDUSTRIAL
Celaya 38104
4400
S.A. DE C.V.
+52 55 5078
8020
Poniente No. 627
México 02300
Int. 1003
+52 81 8336
DANISCO MEXICANA,
México 11510
Santa Catarina 66149
9312
+52 442 215
S.A. DE C.V.
25 de Mayo No. 213-D
ALIMENTOS J. GARCIA,
Querétaro 76000
+52 55 5557
No. 100-705
S.A. DE C.V.
52 55 5258 7200
Homero No. 1804
Av. Tecnológico
HOOGWEGT MEXICO,
México 01210
ECOVAL DAIRY TRADE,
Camarena No. 333
S.A. DE C.V.
Telephone
1747
Guillermo González
DANONE DE MEXICO,
Place
S.A. DE C.V.
Street
Name
116
ossanjuan.com.mx
www.product
com.mx
www.cuadritos.
www.danisco.com
group.com
www.oaktrading
www.hoogwegt.com
www.danone.com.mx
URL
Products/
products
trading of dairy
Manufacturing and
dairy products
Manufacturing of
dients.
ditives and ingre-
Trade of food ad-
Dairy trade
powder
trading of milk
Manufacturing and
of dairy products
Wholesale trading
ucts
fresh dairy prod-
and trading of
Manufacturing
Activities
Carr. Sahuayo La Barca
CAMPO ALEGRE ALIMENTOS
Periférico S/N
S.A. DE C.V.
No. 38
Guillermo Camarena
No. 333
Frente a la estación del
FFCC s/n
DANONE DE MEXICO,
S.A. DE C.V.
DERIVADOS DE LECHE LA
ESMERALDA, S.A. DE C.V.
lende, Gto.
37759 San Miguel de Al-
01210 México, D.F.
(415) 152-25-48,
(55) 5258-7200
www.delesa.com.mx
Cheese
dairy
www.danone.com.mx Cheese, yoghurt,
Cheese
S.A. DE C.V.
(744) 441-50-29
Blvd. Renacimiento
CREMERIA CHIAPAS,
34759 Acapulco, Gro.
Cheese
(55) 5033-6349
No. 872
Cheese, butter,
Av. Lázaro Cárdenas
03440 México, D.F.
butter
Cheese
BLANC, S.A. DE C.V.
www.chen.com.mx
www.chilchota.com
Cheese, cream,
Cheese
Dairy products
bakery industry
products for the
tail sales of dairy
Wholesale and re-
COMERCIALIZADORA LE
(55) 5600-7077
(871) 719-16-84
(353) 572-05-57
(614) 410-52-20
Products/
Activities
cream
09030 México, D.F.
Dgo.
35078 Gómez Palacio,
59000 Sahuayo, Mich.
31030 Chihuahua, Chih.
www.yakult.com.mx
com.mx
www.grupochantilly.
URL
S.A. DE C.V.
COMERCIALIZADORA LÁCTICA, Pochtecas No. 46
Av. Lerdo de Tejada y
CHILCHOTA ALIMENTOS,
Km. 6
Priv. de Ochoa No. 1400
ABARROTES OCAMPO, S.A.
03310 México, D.F.
(55) 5422-1450
No. 1419
Av. División del Norte
+52 55 3688
YAKULT, S.A. DE C.V.
México 08400
Telephone
0500
Chicle No. 255
DISTRIBUIDORA CHANTILLY,
Place
S.A. DE C.V.
Street
Name
117
Toltecas No. 332
Puente Coatzacoalcos
DILASA, S.A.
DISTRIBUIDORA D LACTEOS
31 poniente No. 2924-A
ELABORACION DE
Texas No. 100
Av. del Parque Oriente
No. 713
IBERTRADE
INDUSTRIAL QUESERA
SAN ESTEBAN
(55) 5543-9933
(461) 618-83-00
(55) 5341-8288
(427) 272-00-63
(222) 249-47-79
(55) 5089-2800
(443) 326-03-07
(55) 5390-0878
Telephone
33000 Cd. Delicias, Chih. (639) 474-04-62
03810 México, D.F.
S. Miguel Allende
CUADRITOS BIOTEK,
S.A. DE C.V.
38104 Celaya, Gto.
Km. 9 Carr. Cel.-
52924 Atizapán de
GRUPO INDUSTRIAL
Roble Manz. 63 Lote 8
FOOD TECHNOLOGIES
Qro.
76800 San Juan del Rio,
Zaragoza
No. 4
S.A. DE C.V.
TRADING, S.A. DE C.V.
Panamericana Poniente
ESTABLO NACIONAL
72400 Puebla, Pue.
No. 172
PRODUCTOS LACTEOS
Instituto Técnico Industrial 11340 México, D.F.
ALGIL, S.A. DE C.V.
58150 Morelia, Mich.
Edo. de México
54030 Tlalnepantla,
Place
DISTRIBUIDORA DE LACTEOS
No. 72
Street
Name
118
Products/
Cheese
butter
Cheese, cream,
Cheese
Cheese
Cheese
Cheese
Activities
europeos.com
www.alimentos
com.mx
Cheese
Cheese
butter
www.grupocuadritos. Cheese, cream,
ossanjuan.com.mx
www.product
com.mx
www.esmeralda.
URL
Av. Patria No. 1347-22
INDUSTRIALIZADORA DE
Becerra No. 20
Av. 8 Poniente No. 303
Km. 113 al Norte
Hombres Ilustres No. 555 47400 Lagos de
LA RISUEÑA, S.A. DE C.V.
LACTEOS ABUNDIS
LACTEOS DEL CONCHOS
LACTEOS GOSA, S.A. DE C.V.
Pochtecas No. 46
Antigua Carr. a Roma
Km. 8.5
LACTICA, S.A. DE C.V.
LACTICINOS DEL NORTE,
S.A. DE C.V.
LOPEZ, S.A. DE C.V.
Aramberri y Guerrero
No. 5840
S.A. DE C.V.
LACTEOS Y CARNES FRIAS
Congreso de la Unión
KRAFT FOODS DE MEXICO,
(55) 5271-9273
(55) 5729-2800
(442) 225-04-77
(442) 221-52-52
(33) 3628-7394
Telephone
66600 Apodaca, N.L.
09030 México, D.F.
64000 Monterrey, N.L.
Moreno, Jal.
33620 Saucillo, Chih.
(81) 8386-1467
(55) 5600-7077
(81) 8343-5857
(474) 742-09-10
(621) 475-06-12
33000 Cd. Delicias, Chih. (639) 472-25-58
11870 México, D.F.
07820 México, D.F.
Qro.
Cuauhtémoc No. 262
76905 Villa Corregidora,
Prolongación
S.A. DE C.V.
Querétaro, Qro.
76246 Santiago de
45054 Zapopan, Jal.
Place
NDUSTRIAS LACTEL,
INDUSTRIAS COR, S.A. DE C.V. Av. La Cañada No. 19
S.A. DE C.V.
LACTEOS SANTA ANITA,
Street
Name
119
www.chen.com.mx
com
www.lacteosgosa.
www.lactel.com.mx
www.lyncott.com.mx
URL
Products/
Cheese, milk
Cheese
Cheese
Cheese, cream
Cheese
butter
Cheese, cream,
Cheese
Cheese
Cheese, yoghurt
Cheese
Cheese
Activities
www.lagrange.
Products/
Cheese, cream,
Activities
Cayetano Andrade
Mz. 38 Lt. 1
Av. Los Angeles
No. 1000 Bod. 308-A
Valentín Gama No. 510
PROCESADORA DE LACTEOS,
S.A.
PRODUCTOS ALIMENTICIOS
MENONITAS, S.A. DE C.V.
PRODUCTOS CARRANCO,
78220 San Luis Potosí,
los Garza, N.L.
66480 San Nicolás de
09510 México, D.F.
27000 Torreón, Coah.
BEDACOM
DE CALIDAD
Torres Landa No. 204,
38010 Mexico
06400 México, D.F.
No. 1422 Nte.
S.A. DE C.V.
Fresno No. 176
Calz. Cuauhtémoc
PASTEURIZADORA LAGUNA,
(81) 8317-0656
67140 Guadalupe, N.L.
PRODUCTOS LACTEOS
Bod. 238-239
KOSAS
S.L.P.
Av. Chapultepec No. 800
ORGANIZACION KESOS Y
S.A. DE C.V.
No. 205
S.A. DE C.V.
45690 El Salto, Jal.
los Garza, N.L.
Av. de la Exportación
NEW ZEALAND MILK MEXICO,
Domingo No. 1000
52 461 615 8908
(55) 5547-0469
(444) 813-13-32
(81) 8351-0865
(55) 5732-8830
871) 713-13-12
(33) 3689-1248
aging and trading
com.mx
of dairy products
Processing, pack-
Cheese
butter
Cheese, cream,
Cheese, yoghurt
Cheese
Cheese
Cheese
Cheese
www.bedacom.
com.mx
www.carranco.
com.mx
www.menonitas.
www.sigma.com
com.mx
yoghurt
66499 San Nicolas de
Callejón de Santo
(81) 8353-2300
(222) 235-49-01
URL
Cheese
72380 Puebla, Pue.
Telephone
LAGRANGE, S.A. DE C.V.
Av. Cd. Militar No. 15
LACTO PRODUCTOS DE
Place
ORIENTE, S.A. DE C.V.
Street
Name
120
Zona Centro
Solidaridad 2008
Col. Fraccionamiento
EL SABINO
RIEX, S.A. DE C.V.
QUESOS PADILLA
Nuevo León
Revolución S/N
PRODUCTOS LACTEOS
Col. Valle de Oro
Tulipanes No. 10
Unidad Nacional
66350 Santa Catarina,
Av. La Cañada No. 19
San Juan del Río 76802
59500
0282
+52 427 266
13-50
+52 81 83-36-
0023
+52 381 537
5252
Querétaro
San José de Gracia
+52 442 221
El Marqués 76264
www.riex.com.mx
com.mx
www.elsabino.
www.lyncott.com.mx
com.mx
6444
INDUSTRIAS COR
www.eurolac.
com.mx
www.esmeralda.
URL
+52 477 763
Maquiladores No. 211
EUROLAC
León 37490
2800
No. 172
ALGIL
1463
+52 55 5694
Telephone
+52 55 5089
09410 México, D.F.
Place
Instituto Técnico Industrial 1340 Mexico
DISTRIBUIDORA DE LACTEOS
Central de Abastos -
CREMERIA SAN JOSE
Bodega G-79
Street
Name
121
Products/
products
trade of dairy
Manufacture and
bution of cheeses
Import and distri-
products
trade of dairy
Manufacturing and
products
tributor of dairy
Producer and dis-
products
trade of dairy
Manufacturing and
products
trade of dairy
Manufacture and
tributor of cheese
Importer and dis-
Activities
# 405-201
S.A. DE C.V./Holland Genetics
Reproducción Animal,
Vaccines
Animal Breeding Material and
Derivados COFOCALEC
la Calidad de la Leche y sus
Consejo para el Fomento de
CIGAL
Viveros de Atizapán 62
Simón Bolívar 446
No. 10
Francisco Fagoaga
54080 Tlalnepantla,
Jalisco
44160 Guadalajara,
C.P. 76000 Queréta
com.mx
www.holstein.
URL
14-00
+52-55 53-62-
58 31
+52 33 36 30
Products/
Activities
www.hg.nl
mal.com.mx and
www.reproduccionani Bovine semen
org.mx
www.cofocalec.
+52-442-224-1684 www.cigal.biz\
No. 134
INDUSTRIA DE LA LECHE
CANILEC
+52 55 5271-2100
Av. Benjamín Franklin
CÁMARA NACIONAL DE LA
18 33
(+52-55) 52 55-
Telephone
52 442 2120269
11800 México, D.F.
11590 Mexico, D.F.
Place
HOLSTEIN DE MEXICO, A.C.
(ANGLAC)
MELCHOR OCAMPO
GANADEROS LECHEROS, A.C.
Street
ASOCIACIÓN NACIONAL DE
Dairy organizations
Name
122
Bosque de Duraznos 63
Provimi México
10 09
www.provimi.com
com
+52 55 52 51
www.trouwnutrition.
64-00
com and
+52-33 36-56-
11700 Mexico, D.F.
Products/
products
Animal nutrition
hancers
cines, feed en-
Vaccines, medi-
Activities
products
Animal nutrition
mins
mixes) and vita-
products (pre-
Animal nutrition
ids andVitamins
glucose, aminoac-
electrolite mixture,
www.grupopapalotla. Milk replacers,
roducts.com
www.dsmnutritionalp
Luis Enrique Williams 792 45150 Zapopan, Jalisco
03-64
+52-55 52-64-
60 19
+52-33 36 68
Trouw Nutrition (Nutreco)
06700 Mexico DF
45680 El Salto, Jalisco
com.mx
www.intervet.
URL
www.sloten.com
Orizaba 195
Guadalajara
+52 713 13 50 00
Telephone
cal Divisions (Nutreco)
Animal Feed and Pharmaceuti-
Semillas Papalotla Sloten -
DSM Nutritional Products
Km. 22.5 Carretera
Tianquistengo
Frailes 22
Animal Feed
52600 Santiago
Av. Paseo de los
Intervet México, S.A. DE C.V.
Place
Street
Name
123
Street
Amores 334
Calle 12 No. 191
Stork Mexico
Van Aarsen de Mexico
Animal Processing and Machinery
Name
124
97137 Mérida, Yucatán
03100 Mexico, D.F.
Place
Products/
and poultry)
74-33
mal feed
production of ani-
Equipment for the
group.com
www.aarsen.com
and www.fds.stork
+52-999 926-
machinery (dairy
www.stork.com
Food processing
Activities
29-08
URL
+52-55 56-82-
Telephone
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LEI report 2010-072
Wageningen UR Livestock Research report 397